Education and Expenditure Inequality in Bhutan: An Analysis based on 2007 and 2012 Household Survey Data
Dorji Lethro Takahiro Akita
Based on the 2007 and 2012 Bhutan Living Standard Survey, this study examines the roles of education in expenditure inequality in Bhutan using several decomposition techniques. While the expansion of basic education appears to have narrowed urban-rural expenditure disparity, the expansion of higher education seems to have increased expenditure inequality among households with higher education. Together with a rise in expenditure disparity among educational groups, this has raised overall expenditure inequality. Basic education policies that could raise general educational level still serve as an effective means to mitigate expenditure inequality. Implementing effective higher education policies would be another important option, as the policies that could reduce inequality among households with higher education are crucial. There might be a mismatch between the needs of employers and the qualifications of people with higher education. The government thus needs to formulate and implement higher education policies that could mitigate the mismatch.