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The Dynamics of Returns to Education in Kenyan and Tanzanian Manufacturing

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Author Info
Måns Söderbom
Francis Teal
Anthony Wambugu
Godius Kahyarara

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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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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1468-0084.2006.00162.x
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Publisher 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. Bennell, Paul, 1996. "Rates of return to education: Does the conventional pattern prevail in sub-Saharan Africa?," World Development, Elsevier, vol. 24(1), pages 183-199, January. [Downloadable!] (restricted)
  2. Geeta Gandhi Kingdon, Jeemol Unni, 2001. "Education and Women’s Labour Market Outcomes in India," Education Economics, Taylor and Francis Journals, vol. 9(2), pages 173-195, August. [Downloadable!] (restricted)
  3. Garen, John, 1984. "The Returns to Schooling: A Selectivity Bias Approach with a Continuous Choice Variable," Econometrica, Econometric Society, vol. 52(5), pages 1199-1218, September. [Downloadable!] (restricted)
  4. Robinson, Peter M, 1988. "Root- N-Consistent Semiparametric Regression," Econometrica, Econometric Society, vol. 56(4), pages 931-54, July. [Downloadable!] (restricted)
  5. Richard Blundell & James Powell, 2001. "Endogeneity in nonparametric and semiparametric regression models," CeMMAP working papers CWP09/01, Centre for Microdata Methods and Practice, Institute for Fiscal Studies. [Downloadable!]
  6. Amemiya, Takeshi, 1974. "The nonlinear two-stage least-squares estimator," Journal of Econometrics, Elsevier, vol. 2(2), pages 105-110, July. [Downloadable!] (restricted)
  7. Soderbom, Mans & Teal, Francis, 2004. "Size and efficiency in African manufacturing firms: evidence from firm-level panel data," Journal of Development Economics, Elsevier, vol. 73(1), pages 369-394, February. [Downloadable!] (restricted)
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  8. Psacharopoulos, George, 1994. "Returns to investment in education: A global update," World Development, Elsevier, vol. 22(9), pages 1325-1343, September. [Downloadable!] (restricted)
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  9. Bigsten, A. & Collier, P. & dercon, S. & Fafchamps, M. & Gauthier, B. & Gunning, J.W. & Isaksson, A. & Oduro, A. & Oostendorp, R. & Pattillo, C. & Soderbom, M. & Teal, F. & Zeufack, A., 1998. "Rates of Return on Physical and Human Capital in Africa's manufacturing Sector," Working Papers Series 98-12, Centre for the Study of African Economies, University of Oxford.
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  1. Benhassine, Najy & Fafchamps, Marcel & Söderbom, Måns, 2006. "Wage Gaps and Job Sorting in African Manufacturing," CEPR Discussion Papers 6003, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  2. repec:dia:wpaper:dt200709 is not listed on IDEAS
  3. Al-Samarrai, Samer & Reilly, Barry, 2006. "Education, Employment and Earnings of Secondary School and University Leavers in Tanzania: Evidence from a Tracer Study," MPRA Paper 129, University Library of Munich, Germany. [Downloadable!]
    Other versions:
  4. Ruth Uwaifo Oyelere, 2007. "Africa’s Education Enigma? The Nigerian Story," IZA Discussion Papers 3097, Institute for the Study of Labor (IZA). [Downloadable!]
  5. Abbas, Qaisar & Foreman-Peck, James, 2007. "The Mincer Human Capital Model in Pakistan: Implications for Education Policy," Cardiff Economics Working Papers E2007/24, Cardiff University, Cardiff Business School, Economics Section. [Downloadable!]
  6. Rijkers, Bob & Laderchi, Caterina Ruggeri & Teal, Francis, 2008. "Who benefits from promoting small and medium scale enterprises ? some empirical evidence from Ethiopia," Policy Research Working Paper Series 4629, The World Bank. [Downloadable!]
  7. Dimova, Ralitza & Nordman, Christophe Jalil & Roubaud, François, 2008. "Allocation of Labour in Urban West Africa: Implication for Development Policies," IZA Discussion Papers 3558, Institute for the Study of Labor (IZA). [Downloadable!]
  8. Fox, Louise & Oviedo, Ana Maria, 2008. "Are skills rewarded in Sub-Saharan Africa ? determinants of wages and productivity in the manufacturing sector," Policy Research Working Paper Series 4688, The World Bank. [Downloadable!]
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