Pay Offs to Schooling and Returns to Credentials

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This paper uses Pakistan Social and Living Standard Measurement Survey (PSLM) 2004-2005 to examine labour market earnings. The earning function controls for educational qualifications in addition to years of schooling and other conventional correlates. The estimated returns to additional years of schooling are slightly lower than previous estimates for Pakistan. The findings of the study are consistent with the notion that previous estimates of returns to years of schooling might have soaked the sheepskin effects for credentials. The reported returns to credentials for female are higher than male for whole range of educational attainments. Particularly engineering and medicine education increases female earnings substantially. Overall, the computer and engineering education payoffs are highest. The wage penalty after controlling for education and other influences declines significantly for female workers.