Disability and Returns to education in a Developing Country

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This paper estimates wage returns to investment in education for persons with disabilities in Nepal, using information on the timing of being impaired during school-age years as identifying instrumental variables for years of schooling. They combine primary data with nationally representative survey data from the Nepal Living Standard Survey 2003/2004 (NLSS II). The estimated rate of returns to education is very high among persons with disabilities, ranging from 19.3 to 25.6%. The coexistence of these high returns to education and limited years of schooling suggest that there are supply side constraints in education to accommodate persons with disabilities. Policies to eliminate these barriers will mitigate poverty among persons with disabilities, the largest minority group in the world.

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