What Factors in Nepal Account for the Rural–Urban Discrepancy in Human Capital? Evidence from Household Survey Data

We analyze the factors that determine human capital formation in rural and urban sectors of Nepal decompose intersectoral difference into variables underlying supply demand for capital. In particular, we examine role access to primary secondary schools as well socioeconomic, demographic, geographic characteristics households. Our results are based on Living Standards Survey data 2004 2011. find schooling has a significant impact level capital, especially areas. Blinder–Oaxaca decomposition attributes large portion rural–urban gap socioeconomic demographic variables. Yet, reinforce our claim an improvement road infrastructure is also necessary, particularly vast sector Nepal, if development provide greater contribution national welfare.