ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Does Education Pay Off? Subjective Expectations on Education in Rural India

This paper presents the first results of a study conducted on subjective expectations that parents have about the costs and returns to education. This is done by using a detailed child-level dataset from the three villages of Dokur (Mahbubnagar district, Andhra Pradesh), Kalman and Shirapur (Sholapur district, Maharashtra). The perceived returns differ by region, gender of the child and caste, with girls and members of the scheduled caste and the tribe categories being at a disadvantage.

The data for the article were gathered in India during 2007-08, in collaboration with the International Crop Research Institute of the Semi-Arid Tropics, and funded through a NSF Doctoral Dissertation Research Improvement Grant, an AAEA McCorkle Fellowship, a Mario Einaudi Center for International Studies International Research Travel Grant, a Cornell University Graduate School Research Travel Grant, an International Student and Scholar Ofce Grant and funds provided by AEM-CU and Chris Barrett. I thank the research assistants and enumerators on the eld: Sanjit Anilesh, Shraavya Bhagavatula, Pramod Bangar, Sana Butool, V D Duche, Shital Duche, Madhav Dhere, Nishtha Ghosh, Navika Harshe, Meenal Inamdar, Shilpa Indrakanti, Sapna Kale, Jessica Lebo, Nishita Medha, Ramesh Babu Para, Abhijit Patnaik, Gore Parmeshwar, Arjun Waghmode and Yu Qin. This article beneted from discussions with Cynthia Bantilan, Kaushik Basu, Chris Barrett, A V Chari, Steven Coate and George Jakubson. The usual disclaimers apply. P arents invest in the education of their children as they expect this will increase their and their children’s welfare in the long term. Previous research has shown that the magnitude of this investment depends on many factors, including parental education, social and economic background, work opportunities, village and regional development, school quality, costs and educational subsidies.1

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