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Private rates of return to education of Africans in South Africa for 1995: a Double Hurdle model

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  • Philip AE Serumaga-Zake
  • Willem Naude

Abstract

In this study, the private rates of return to education of African males and females in South Africa are estimated. Both Heckman's (1976) two-stage selection model and the more recent Double Hurdle model, with correlated errors between the participation and employment equations, is found to be more suitable for the earnings analysis than the one with uncorrelated errors. This might imply that people make the decisions to participate in the labour force and to take up a job offer simultaneously. The private rate of return to education of Africans is found to be 12 and 11 per cent for males and females, respectively. These rates are significantly higher than those found in previous analyses of rates of return to education in South Africa. In these older studies, the private rate of return to education of Africans was found to vary from 2,5 to 7,7 per cent.

Suggested Citation

  • Philip AE Serumaga-Zake & Willem Naude, 2003. "Private rates of return to education of Africans in South Africa for 1995: a Double Hurdle model," Development Southern Africa, Taylor & Francis Journals, vol. 20(4), pages 515-528.
    • Handle: RePEc:taf:deveza:v:20:y:2003:i:4:p:515-528
    DOI: 10.1080/0376835032000124510
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    Cited by:

    1. Martine Mariotti & Juergen Meinecke, 2009. "Nonparametric Bounds on Returns to Education in South Africa: Overcoming Ability and Selection Bias," ANU Working Papers in Economics and Econometrics 2009-510, Australian National University, College of Business and Economics, School of Economics.
    2. José de Hevia & María Arrazola, 2009. "Marginal effects in the double selection regression model: an illustration for the wages of women in Spain," Economics Bulletin, AccessEcon, vol. 29(2), pages 611-621.

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