The roles of education in expenditure inequality in Bhutan: an analysis in an urban–rural context

  • Dorji Lethro
  • Takahiro AkitaEmail author


Based on the 2007 and 2012 Bhutan living standard survey, this study analyzes the roles of education in expenditure inequality in Bhutan in an urban–rural context. Expenditure inequality is high among SAARC countries. Since urban–rural disparity is not large, much of expenditure inequality is due to inequalities within urban and rural areas, particularly within urban areas. Unless inequalities within urban and rural areas are reduced, therefore, overall expenditure inequality would not decrease. The expansion of higher education seems to have increased expenditure inequality among households with higher education, particularly in urban areas. Together with a rise in expenditure disparity among educational groups, this has raised overall expenditure inequality. In rural areas, the government needs to promote basic education, while developing basic infrastructures and creating urban opportunities to mitigate rural–urban migration. In urban areas, the government needs to strengthen industrial infrastructure and promote labor-intensive manufacturing activities to generate employment opportunities.


Education Decomposition of educational Gini Blinder–Oaxaca decomposition Hierarchical decomposition of expenditure inequality Bhutan 

JEL Classification

I24 I25 O15 O18 



Takahiro Akita is grateful to the Japan Society for the Promotion of Science for its financial support (Grant-in-Aid for Scientific Research 15K03458, 15K03473 and 18K01589). The authors thank two anonymous reviewers for their helpful comments.


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Copyright information

© The Japan Section of the Regional Science Association International 2019

Authors and Affiliations

  1. 1.National Statistics Bureau, Royal Government of BhutanThimphuBhutan
  2. 2.Graduate School of BusinessRikkyo UniversityToshimaJapan

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