Econometric Analysis of Returns to Education of Rural and Urban Labour Markets Workers in Tamil Nadu

Published On: 2020-09-28 12:45:27

Price: ₹ 500.00

Author: R. Mariappan and K. Gopinath

Author Address: Assistant Professor and Department of Econometrics, University of Madras 2Alumnus, Chennai-600 005 (Tamil Nadu)

Keywords: Human capital, quantile regression, returns to education, wage differential

JEL Codes: C31, I21, I26, J24, J31


The objective of this study was to empirically evaluate the returns to education of rural and urban labour markets workers in Tamil Nadu using the IHDS data with appropriate Econometric models. First, the present study estimated the earning functions of the rural and urban market's workers by OLS technique and standard Mincerian earning functions. Secondly, the quantile regression method was also used to examine the evolution of wage inequality. The findings of the study showed that the effects of education and experience on the log of hourly wages were positive, and these coefficients were statistically significant. The returns to education increased with the level of education and differed among the workers of rural and urban labour markets. The results showed that the rates of returns to primary, middle and higher secondary were higher in the urban market, whereas those of secondary and graduation were higher in the rural market. The study revealed that the effect of education was not the same across the rural and urban wage distribution. The rate of returns differed considerably within education groups across different quantiles of the wage distribution. 


Indian Journal of Economics and Development
Volume 16 No. 3, 2020, 336-344
Indexed in Clarivate Analytics (ESCI) of WoS
Scopus : Title Accepted
NAAS Score: 4.82