Private Returns to Education and Determinants of Earnings

The main objective of this study was to explore the major factors that affect the earnings and to estimate the returns to education (RTEdu.) for the workforce of educational institutions in Lahore-Pakistan. Primary data were collected by the researcher himself from a sample of 8327 respondents. The factors such as workforce education, experience, training, computer use, gender, marital status, institution sector from where the respondent has completed his/her Secondary School Certificate, nature of job, family background, and family status are found to be contributing to the earnings of the workforce of various categories of the educational institutions.The RTEdu. for the workforce of schools, colleges and universities increases, on average, by 12.4, 15.8, and 12.5 percent, respectively for every one year increase in schooling. The RTEdu. has been found higher for the workforce of various categories of private sector as compared to the workforce of various categories of public sector educational institutions. The results of this study provide a clear support to the human capital theory. The concavity in experience-earning profile is also observed.