Entering The Labor Market Or Continuing Education Essay example

1110 Words Jun 27th, 2016 5 Pages
Entering the labor market or continuing education beyond a certain point is a very important individual level investment decision. An important determinant of the demand for education is its expected benefits. The benefits depend upon the value of an individual’s labour input, which in turn depends upon the level of education. Hence, the education-wage relationship can be used to measure the returns to schooling.
The rural and urban sectors differ widely in terms of the education and employment opportunities available to their residents. Rural areas widely, however not solely, depend on agriculture for livelihood while the range of jobs in urban areas is broader. These factors, such as different availability of jobs, lead to a different demand for education in the two sectors and therefore education has different rates of returns in rural and urban areas. This makes the sector specific study of returns to education very interesting. Another fascinating facet is the rural urban migration, which is a quotidian occurrence in countries like India with a marked difference in returns to education between the two sectors.
This leads to this study, which firstly aims to estimate to returns to education for rural and urban areas separately. Secondly, this study intends to decompose the differences between the two sectors as the differences occurring from a difference in characteristics like education levels, and the differences stemming from a difference in coefficients in the two…

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