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Paper short abstract

In this paper we document persistent differences across socioreligious groups in acquiring tertiary education in India. Using the most recent employment survey data (PLFS), we calculate differences in returns to tertiary education that shows widening gap across the socioreligious groups.

Paper long abstract

In this paper, we document persistent differences in completion of tertiary education and calculate returns to education across in India. We deploy unit level data from the Periodic Labour Force Survey for the year 2023-24. For calculating/estimating returns to education, we use Mincerian Wage Equation and correct for sample selection bias using Heckman’s model. We find that returns to education is positive and increases with every additional level of education for entire sample of those employed. However, when we estimate the returns to education by employment type, for regular wage/salaried employment, returns increase monotonically and to a lesser extent for self-employment. We also find that that there is no significant relation between wages and education for the casual workers. The socio-economic factors like socioreligious groups, gender and place of residence etc appear to play an important role in determining income and employment probabilities. Our analysis suggests that at the higher levels of education, i.e. graduate and above, returns are significantly higher than those for below the graduate levels with prominent variation across socioreligious. We suspect that differences in the quality of tertiary education might explain the socioreligious group differences. It implies, therefore, that additional years of education, specially technical degrees and diploma/certificate (both below and above graduation) yield better returns.