Education is a key factor for the growth of human capital. Human capital is directly related to economic growth and development of a country. This paper looks at the economic returns and cost to different fields of study in Pakistan. To assess the return to education, two main degree programsmaster's and professional bachelor'sare taken into account. Benefits to the individual have been calculated using the government pay scale. Household income data and individual expenditure have been used for calculating per capita educational expenditure. This data has been derived from Pakistan Social and Living Standard Measurement Survey (2004-05). The data is analyzed using Net Present Value (NPV) and Internal Rate of Return (IRR). The result reveals that the rate of return calculated for master's's degree is 26.52% which is comparatively more than professional bachelor's degree as it is calculated as 23.83%. The results presented in this study are important to government, academic, and policy makers.

Human capital is considered an important determinant of economic growth and an effective vehicle for reducing inequality and absolute poverty (World Bank, 2008). Therefore investment in human capital in the form of higher education is recognized as capital investment (Barnet, 1990) and the "engine of development in the new world economy" (Ozsoy, 2008). According to Abbas (undated), in the past, education was considered as a tool for human development but now it is considered as a tool of development in vast meanings such as economical development, social development and also human resource development.

The positive correlation between education and earning is well established in empirical researches. It is confirmed that the economic return to the individual and society rise with the educational attainment. For example, Saxton (2000) observe that increase in educational attainment increased the earnings of workers and economic growth in the US. However, the economic return of higher education qualifications varies according to subjects, gender, and socioeconomic background. For example, Asplund (2001) estimated the average rate of return to education in 15 European countries in 1995 and found that the returns to education was different across the countries.

This study adds to the literature by providing estimates on the returns to field of study in Pakistan in 2004-2005 by comparing two-year master's degree program to a professional bachelor's program of four years duration.

Higher Education Journal, Economic Returns, Public Sectors, Human Capital, Capital Investments, Economical Development, Human Resource Development, Social Development, Higher Education Sectors, Public Sector Universities, Higher Education Programs, Educational Investments.