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What Factors in Nepal Account for the Rural–Urban Discrepancy in Human Capital? Evidence from Household Survey Data

1
Social Science Division, University of Minnesota Morris, Morris, MN 56267, USA
2
School of Accounting, Finance, Economics, and Decision Sciences, Western Illinois University, Macomb, IL 61455, USA
3
Department of Economics, Eastern Illinois University, Charleston, IL 61920, USA
*
Author to whom correspondence should be addressed.
Academic Editor: Luca Salvati
Economies 2021, 9(2), 83; https://doi.org/10.3390/economies9020083
Received: 21 February 2021 / Revised: 3 May 2021 / Accepted: 14 May 2021 / Published: 25 May 2021
We analyze the factors that determine human capital formation in the rural and urban sectors of Nepal and decompose the intersectoral difference into variables underlying supply and demand for human capital. In particular, we examine the role of access to primary and secondary schools as well as the socioeconomic, demographic, and geographic characteristics of households. Our results are based on Nepal Living Standards Survey data for 2004 and 2011. We find that access to schooling has a significant impact on the level of human capital, especially in rural areas. Our Blinder–Oaxaca decomposition attributes a large portion of the rural–urban gap to socioeconomic and demographic variables. Yet, the results reinforce our claim that an improvement in schooling access and road infrastructure is also necessary, particularly in the vast rural sector of Nepal, if human capital development is to provide a greater contribution to national welfare. View Full-Text
Keywords: human capital index; rural–urban difference; Blinder–Oaxaca decomposition; Nepal Living Standards Surveys human capital index; rural–urban difference; Blinder–Oaxaca decomposition; Nepal Living Standards Surveys
MDPI and ACS Style

Devkota, S.; Ghimire, S.; Upadhyay, M. What Factors in Nepal Account for the Rural–Urban Discrepancy in Human Capital? Evidence from Household Survey Data. Economies 2021, 9, 83. https://doi.org/10.3390/economies9020083

AMA Style

Devkota S, Ghimire S, Upadhyay M. What Factors in Nepal Account for the Rural–Urban Discrepancy in Human Capital? Evidence from Household Survey Data. Economies. 2021; 9(2):83. https://doi.org/10.3390/economies9020083

Chicago/Turabian Style

Devkota, Satis, Shankar Ghimire, and Mukti Upadhyay. 2021. "What Factors in Nepal Account for the Rural–Urban Discrepancy in Human Capital? Evidence from Household Survey Data" Economies 9, no. 2: 83. https://doi.org/10.3390/economies9020083

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