Does the labour market explain lower female schooling in India?

Labour market discrimination against women and parental discrimination against daughters are two of the most commonly cited explanations of the gender gap in education in developing countries. This study empirically tests the labour market explanation for India rising recent household survey data. The results reveal substantial omitted family background bias in the estimates of rates of return to education. The findings suggest that as well as overall labour market discrimination, girls face poorer economic incentives to invest in schooling than boys because they reap lower labour market returns to education than boys.