Turning a Problem into an Asset? Education and Asset Ownership

Abstract

This thesis aims to measure the returns to education for females in Nepal. By using newly acquired household data from the Demographic and Health Survey of 2022, I examine how the household ownership of welfare goods increases with the number of years of education. In the absence of income data, I construct an alternative, demand-based index to capture welfare as a mean value of five welfare-improving measures. The index is based on a CES Utility Function and builds upon the assumption of low grades of substitutability. By employing the index using OLS Estimation, it is estimated that the general female population of Nepal receives low marginal welfare benefts per added year of education. The low estimated marginal gains are explained by observing that the respondents who receive little welfare from education weigh the estimations down such that they exhibit lower gains than the actual marginal benefts. At the same time there are a few respondents who gain more benefts from education. There exists more signifcant marginal gains from secondary and tertiary education than from primary respondents, suggesting that the relationship between education and welfare might be non-linear. This variation in educational gains can be attributed to provincial differences, age, and potentially husband’s years of schooling. It is estimated that residents of Bagmati receive the most beneficial marginal gains, while residents of Sudurpashchim, Karnali and Madhesh receive the least marginal gains.