Returns to schooling, mobility, and the gender wage gap: Evidence from Sri Lanka and India

This dissertation consists of three essays. The first essay deals with the on-going debate about the size and direction of measurement-error bias in returns to education, using evidence from Sri Lanka. This corrected measure is approximately 5.5%, which is less than the corresponding OLS estimate of 7.8% for two person households. The second essay examines the effectiveness of free education on improving intergenerational educational mobility in Sri Lanka, using two measures: the estimated effect of parental education on that of the child; and schooling correlations between parents and children. Results indicate that educational mobility has increased across generations. However, when compared to countries with no free education in place, schooling correlations suggest that Sri Lanka has a relatively low intergenerational educational mobility, posing important policy issues relating to the free education system that has long been in place in Sri Lanka. The final essay is an analysis of the gender wage gap in urban India. Large wage gains by primary educated females were observed during 1993 and 1999. These gains are mostly concentrated among low educated females in the casual informal sector. Several decompositions of the gender wage gap are performed in order to get an understanding of the factors that underlie such changes. The contribution of differences in the male-female wage structure to the gap has increased during this period. Occupational differences between men and women explain most of the wage gap that is due to differences in productive attributes.