Research Paper on What Elements in Nepal Explain the Human Capital Gap Between Rural and Urban Areas? Information from a Household Survey

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Title: What Elements in Nepal Explain the Human Capital Gap Between Rural and Urban Areas? Information from a Household Survey

Abstract: We examine the determinants of human capital formation in Nepal’s rural and urban areas and break down the intersectoral disparity into factors underlying supply and demand. We focus on the importance of households’ socioeconomic, demographic, and geographic characteristics as well as their access to primary and secondary education. Our findings are based on information from the 2004 and 2011 Nepal Living Standards Survey. Our research shows that the level of human capital is significantly influenced by access to education, particularly in rural areas. According to our Blinder-Oaxaca decomposition, socioeconomic and demographic factors account for a sizable portion of the rural-urban divide. However, the findings support our assertion that, in order for human capital development to significantly increase contributions to national welfare, improvements in schooling access and road infrastructure are also required, particularly in Nepal’s sizable rural sector.

Keywords: human capital index; rural–urban difference; Blinder–Oaxaca decomposition; Nepal Living Standards Surveys

Paper Quality: SCOPUS / Web of Science Level Research Paper

Subject: Economics

Writer Experience: 20+ Years

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