BRIDGING KNOWLEDGE GAPS: ESTIMATING RETURNS TO EDUCATION IN NEPAL
Abstract
Education stands as an essential human right and a linchpin for development and poverty alleviation efforts (Sen, 1989; 2000). It not only bestows individual and societal advantages but also serves as a driving force for investments by individuals, governments, and other stakeholders. The benefits of education extend beyond personal prosperity, encompassing the promotion of peace and stability within societies. Conversely, individuals bereft of fundamental literacy and numeracy skills often find themselves ensnared in a perpetual cycle of poverty. Education is a catalyst for acquiring skills that, in turn, empower individuals, bolster cognitive well-being, and enhance social cohesion.
The literature underscores the pivotal role of returns on investment in education as a fundamental determinant of educational spending (Becker, 1967; Mincer, 1974; Schultz, 1961). An understanding of the public and private returns to education equips individuals and policymakers with the essential information needed to make informed choices regarding educational investments. However, in many developing nations, this crucial knowledge is often lacking, leading to recurrent underinvestment in education. Notably, in the context of Nepal, a dearth of research studies focusing on returns to education exists. The nation grapples with high illiteracy rates, limited school enrollment, elevated dropout rates, and a substantial gender gap in educational access.
This study addresses this void and endeavors to estimate the private returns to education within the specific context of Nepal. Against the backdrop of these challenges and disparities, the research strives to provide valuable insights into the economic benefits and incentives associated with educational attainment in Nepal. Understanding the returns on education is fundamental to fostering inclusive and equitable educational policies that can contribute to poverty reduction, social stability, and overall development.
