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The Dynamics of Returns to Education in Kenyan and Tanzanian Manufacturing

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  • M�ns Söderbom
  • Francis Teal
  • Anthony Wambugu
  • Godius Kahyarara

Abstract

We use micro data on manufacturing employees in Kenya and Tanzania to estimate returns to education and investigate the shape of the earnings function in the period 1993-2001. In Kenya, there have been long-run falls in the returns to education while for Tanzania there is evidence of rising returns in the 1990s. The earnings functions are convex for both countries and this result is robust to endogeneity. Convexity may be part of the explanation as to how rapid expansion of education in Africa has generated so little growth if expansion has been concentrated at lower levels of education. Copyright 2006 Blackwell Publishing Ltd.

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Bibliographic Info

Article provided by Department of Economics, University of Oxford in its journal Oxford Bulletin of Economics and Statistics.

Volume (Year): 68 (2006)
Issue (Month): 3 (06)
Pages: 261-288

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Handle: RePEc:bla:obuest:v:68:y:2006:i:3:p:261-288

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  1. Amemiya, Takeshi, 1974. "The nonlinear two-stage least-squares estimator," Journal of Econometrics, Elsevier, Elsevier, vol. 2(2), pages 105-110, July.
  2. Arne Bigsten & Paul Collier & Stefan Dercon & Marcel Fafchamps & Bernard Gauthier & Jan Willem Gunning & Anders Isaksson & Abena Oduro & Remco Oostendorp & Cathy Pattillo & Måns Söderbom & Francis T, 1998. "Rates of return on physical and human capital in Africa's manufacturing sector," CSAE Working Paper Series 1998-12, Centre for the Study of African Economies, University of Oxford.
  3. Garen, John, 1984. "The Returns to Schooling: A Selectivity Bias Approach with a Continuous Choice Variable," Econometrica, Econometric Society, Econometric Society, vol. 52(5), pages 1199-1218, September.
  4. Geeta Gandhi Kingdon & Jeemol Unni, 2001. "Education and Women's Labour Market Outcomes in India," Education Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 9(2), pages 173-195.
  5. Måns Söderbom & Francis Teal, 2004. "Size and Efficiency in African Manufacturing Firms:Evidence from Firm-Level Panel Data," Development and Comp Systems 0409010, EconWPA.
  6. Robinson, Peter M, 1988. "Root- N-Consistent Semiparametric Regression," Econometrica, Econometric Society, Econometric Society, vol. 56(4), pages 931-54, July.
  7. Bennell, Paul, 1996. "Rates of return to education: Does the conventional pattern prevail in sub-Saharan Africa?," World Development, Elsevier, Elsevier, vol. 24(1), pages 183-199, January.
  8. Richard Blundell & James Powell, 2001. "Endogeneity in nonparametric and semiparametric regression models," CeMMAP working papers, Centre for Microdata Methods and Practice, Institute for Fiscal Studies CWP09/01, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
  9. Psacharopoulos, George, 1993. "Returns to investment in education : a global update," Policy Research Working Paper Series 1067, The World Bank.
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