An An empirical analysis of education, earning and household expenditure financing: the case of Swabi District

Abstract

Background: Education is considered as the most important tool to boost
economic growth and human development. It has been established in the
literature that higher level of education leads to higher development levels.
Objectives: The main objective of our research is to investigate the Mincer and
Becker earning function. This function is the study of the effects of investment in
schooling and on-the-job training on the level, pattern, and interpersonal
distribution of life cycle earnings associated with the pioneering work on human
capital. Therefore, this theatrical function is empirically tested in the context of
Swabi District, Khyber Pakhtunkhwa, Pakistan.
Methods: A cross-sectional design was adopted to conduct this study. A sample
of 96 individuals were interviewed through a standardized questionnaire from
Razzer Tehsil, Swabi District, Khyber Pakhtunkhwa, Pakistan. A multi-stage
sampling procedure was used to specify the sample size. Simple and multiple
regression models were used to explore the association between respondents’
income (dependent variable) and explanatory variables (education, experience and
skill).
Results: Findings shows that all the econometrics models were good fit. For
instance R2=0.66 for education, 0.72 for experience, 0.82 for kills and 0.62 for
overall model. It implies that the variations in the dependent variable (earnings)
were significantly explained by independent variables. Education (β= 3886.95, pvalue= 0.005), experience (β= 1181.987, p-value= 0.001) and skill (β= 6681.767, pvalue= 0.096) were significantly affecting income of individuals in separate models.
However, skill was noted insignificant in the multiple-regression model.
Conclusions: The findings of this study showed that education, experience and
skill are very important determinants of individuals’ income. The federal
government should ensure universal access to education. The local government
may focus on technical education to produce skilled labor or trained and qualified
human resource.