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Education, Employment and Earnings of Secondary School and University Leavers in Tanzania: Evidence from a Tracer Study

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Author Info
Samer Al-Samarrai
Barry Reilly

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Abstract

This study uses a tracer survey of secondary school completers in Tanzania to analyse the impact of educational qualifications on labour market earnings. We show that the rates of return to the highest educational qualifications for wage employees are not negligible and, at the margin, provide an investment incentive. However, we find little evidence of human capital effects in the earnings determination process for the self-employment sector. Introducing controls for father's educational background and a set of school fixed effects designed to proxy for school quality and potential labour market network effects reduces the estimated rates of return to educational qualifications. A comparison of our results with the available evidence from other countries in the region suggest that, despite an extremely small secondary and university education system, the private rates of return to education in the Tanzanian wage employment sector are comparatively low.

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File URL: http://www.informaworld.com/openurl?genre=article&doi=10.1080/00220380701789950&magic=repec&7C&7C8674ECAB8BB840C6AD35DC6213A474B5
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Article provided by Taylor and Francis Journals in its journal Journal of Development Studies.

Volume (Year): 44 (2008)
Issue (Month): 2 ()
Pages: 258-288
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Handle: RePEc:taf:jdevst:v:44:y:2008:i:2:p:258-288

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Måns Söderbom & Francis Teal & Anthony Wambugu & Godius Kahyarara, 2004. "The Dynamics of Returns to Education in Kenyan and Tanzanian Manufacturing," Development and Comp Systems 0409041, EconWPA. [Downloadable!]
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  2. Dorothe Bonjour & Lynn F. Cherkas & Jonathan E. Haskel & Denise D. Hawkes & Tim D Spector, 2003. "Returns to Education: Evidence from U.K. Twins," American Economic Review, American Economic Association, vol. 93(5), pages 1799-1812, December. [Downloadable!]
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  3. John P. Haisken-DeNew & Christoph M. Schmidt, . "Inter-Industry and Inter-Region Differentials: Mechanics and Interpretation," Working Papers 9504, SELAPO Center for Human Resources. [Downloadable!]
  4. 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)
  5. Paul Glewwe, 2002. "Schools and Skills in Developing Countries: Education Policies and Socioeconomic Outcomes," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 436-482, June.
  6. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-61, January. [Downloadable!] (restricted)
  7. George Psacharopoulos & Harry Anthony Patrinos, 2004. "Returns to investment in education: a further update," Education Economics, Taylor and Francis Journals, vol. 12(2), pages 111-134, August. [Downloadable!] (restricted)
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  8. Orme, Chris, 1990. "The small-sample performance of the information-matrix test," Journal of Econometrics, Elsevier, vol. 46(3), pages 309-331, December. [Downloadable!] (restricted)
  9. Krueger, Alan B & Summers, Lawrence H, 1988. "Efficiency Wages and the Inter-industry Wage Structure," Econometrica, Econometric Society, vol. 56(2), pages 259-93, March. [Downloadable!] (restricted)
  10. Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863 Elsevier. [Downloadable!] (restricted)
  11. Psacharopoulos, George, 1993. "Returns to investment in education : a global update," Policy Research Working Paper Series 1067, The World Bank. [Downloadable!]
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  12. Jolliffe, Dean, 1998. "Skills, Schooling, and Household Income in Ghana," World Bank Economic Review, Oxford University Press, vol. 12(1), pages 81-104, January.
  13. Zanchi, Luisa, 1998. "Interindustry wage differentials in dummy variable models," Economics Letters, Elsevier, vol. 60(3), pages 297-301, September. [Downloadable!] (restricted)
  14. Behrman, Jere R & Birdsall, Nancy, 1983. "The Quality of Schooling: Quantity Alone is Misleading," American Economic Review, American Economic Association, vol. 73(5), pages 928-46, December. [Downloadable!] (restricted)
  15. Glewwe, Paul, 1996. "The relevance of standard estimates of rates of return to schooling for education policy: A critical assessment," Journal of Development Economics, Elsevier, vol. 51(2), pages 267-290, December. [Downloadable!] (restricted)
  16. Stewart, Mark B, 1983. "On Least Squares Estimation When the Dependent Variable Is Grouped," Review of Economic Studies, Blackwell Publishing, vol. 50(4), pages 737-53, October. [Downloadable!] (restricted)
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  17. Knight, J B & Sabot, R H, 1981. "The Returns to Education: Increasing with Experience or Decreasing with Expansion?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 43(1), pages 51-71, February.
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  1. Christophe Muller, Christophe J. Nordman, 2008. "Intra-Firm Human Capital Externalities in Tunisia," THEMA Working Papers 2008-38, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise. [Downloadable!]
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