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Estimating Returns to Education in Off-Farm Activities in Rural Ethiopia

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  • Verwimp, Phillip

Abstract

I have used an extended version of Mincer's original model to estimate the returns to schooling in rural Ethiopia. In a first step a multinomial log it model is applied to distinguish between for groups of people,(1) full-time farmers, (2) part-time farmers and part-time wage workers,(3) part-time farmers and part-time traders and (4) full-time non-farmers. In a second step, a correction for sample selectivity is made using the Lee-Heckman method and the returns are estimated. The results show that returns on schooling are high in group (4)and lower in groups(2) and (3). Entry in well-paid jobs is constrained for non-educated people. Women are particularly well represented in the third group but strongly underrepresented in the fourth group. The estimation shows overall that education is a worthwhile investment in rural Ethiopia and the fact that households under invest in education can be attributed to the lack of resources at the household level.

Suggested Citation

  • Verwimp, Phillip, 1999. "Estimating Returns to Education in Off-Farm Activities in Rural Ethiopia," Ethiopian Journal of Economics, Ethiopian Economics Association, vol. 5(2), pages 101-101, February.
    • Handle: RePEc:ags:eeaeje:251803
    DOI: 10.22004/ag.econ.251803
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    Cited by:

    1. Heather Congdon Fors & Kenneth Houngbedji & Annika Lindskog, 2015. "Land Certification and Schooling in Rural Ethiopia," PSE Working Papers halshs-01202695, HAL.
    2. Congdon Fors, Heather & Houngbedji, Kenneth & Lindskog, Annika, 2019. "Land certification and schooling in rural Ethiopia," World Development, Elsevier, vol. 115(C), pages 190-208.
    3. World Bank, 2005. "Education in Ethiopia : Strengthening the Foundation for Sustainable Progress," World Bank Publications - Books, The World Bank Group, number 7434, December.

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