Title: Re-contextualising the Human Capital Theory in Bangladesh: More Education Does NOT Always Yield Higher Earnings
Stream: International Education
Presentation Type: Oral Presentation
Authors:
Rubaiya Murshed, University of Cambridge, United Kingdom
Abstract:
According to the orthodox human capital theory, returns to education is universal, i.e., everyone experiences the same returns to higher levels of education. Thus, the more educated a person is, the higher their labour market earnings. However, the theory overlooks nuances specific to particular contexts and without acknowledging specific contextualization, it may be the case that the theory is not functioning as predicted in all cases. Bangladesh is a context where the human capital theory has informed educational policies, but without considering criticalities that may lead to the theory not being ‘fitting’ in the same way across different groups of individuals. This article argues that it may not be the case that higher education levels always entail similar higher earnings because there are different groups of individuals to consider for whom the structure of the job market may differ, whose aspirations and skills may be different. Thus, this article tests, using nationally representative data, whether the theory holds in the case of different groups of individuals within Bangladesh, while taking into account the different types of work that individuals pursue. The empirical analysis, using the two-stage least-squares (2SLS) estimation technique, reveals that the human capital theory does not hold for individuals who studied in the religious stream of education and, in some cases, for females and for individuals who grew up in rural areas. Therefore, this article advocates that the theory needs to evolve and be recontextualized to remain consistent in particular contexts such as in the context of individuals who study in the religious education stream in Bangladesh.
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