Paper title: Return to Education of Rural Male Wage-earners: Evidence from the Bangladesh Integrated Household Survey, 2011-2019
Abstract: This article estimates the returns to education for male wage earners in rural Bangladesh using nationally representative survey data spanning three rounds from 2011 to 2019. Unlike previous studies, which did not utilize these datasets, this research captures temporal changes in the returns to education over an extended period. Consequently, this study provides a more comprehensive picture of the educational returns over eight years. The findings reveal substantial heterogeneity in educational returns across various dimensions. Notably, returns are significantly lower in rural areas, whereas the non-agricultural sector offers considerably higher returns compared to the agricultural sector. Additionally, returns vary depending on individual characteristics such as religious affiliation and other socio-demographic factors. To address the potential endogeneity of education, the study employs instrumental variable techniques, using dummy variables for different levels of mothers' education as instruments. This approach is a novel departure from earlier research, providing a more accurate estimate of the association between education and wages, though utilizing different levels of mothers’ education as the instrument. Ordinary Least Squares (OLS) estimates (3.75%, 2.36%, and 4.23% for 2011-12, 2015, and 2018-2019) tend to undervalue the returns to education relative to the Instrumental Variable (IV) regression (6.44%, 4.73%, and 6.45% for 2011-12, 2015, and 2018-2019), primarily due to negative "ability" or "motivation" bias, which suggests that unobserved factors influence both educational attainment and earnings potential. By addressing these issues, the government can more effectively leverage education as a tool for poverty reduction, rural development, and long-term economic growth. Keywords: Return to education, male wage earners, schooling years, annual income, different levels of mother’s education, rural Bangladesh. DOI: Article Info: Submission Date: May 13, 2025; Acceptance Date: October 17, 2025.
