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In many of these models the rate of return to education is considered constant and independent of S, but it is more logical to assume that the rate of return to education is not constant and is partly a function of the growth rate, the composition of growth, and the change in the supply of educated labour relative to demand (Carnoy, 1972).
In the study, by Khan and Irfan (1985) have analysed rate of return to education in Pakistan using Population, Labour Force and Migration Survey for 1979.
Figure 1 shows the average relative rate of return to education for 18 Latin American countries-with returns to higher education growing much faster than the returns to lower levels of education.
Card and Krueger (1992) use state-level data to estimate the effect of school quality on the rate of return to education for men born between 1920 and 1949.
In developed industrial economies, Psacharapolous found that the rate of return to education was, on average, less than the rate of return to physical capital.
Further, not accounting for such benefits could cause an underestimate in measures such as the rate of return to education or the benefits of such government programs as Head Start.
1] in Equation 1 represents the rate of return to education.
The estimates of the rate of return to education obtained by different authors are also markedly different from one another.