Regional differences in wage premia and returns to education by gender in India

This paper analyses the regional differences in returns to education by gender in India using the nation wide NSSO "Employment and Unemployment" survey data. Quantile regression and ordinary least squares methods are used for estimating wage functions. The results show evidence of wide variation in the wage gains to differenct levels of education across the states. In general, in most states, the premia are lowest for primary level, ranging from 2 per cent to 10.6 per cent, and highest for secondary education where it varies between 12 to 24.3 per cent. Wage primum to primary education, particularly for males is higher in the less developed states and regions where the level of poverty is high than in the more developed ones. There is a negative correlation between primary school enrolment and returns to primary education suggesting that educational expansion acts to lower the market reward to education.