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The returns to vocational training and academic education: Evidence from Tanzania

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  • Godius Kahyarara
  • Francis Teal

Abstract

In this paper we ask what can account for the continuing strong preference for academic education in Africa where the level of development is so low and there are few wage jobs and which form of educational investment, the academic or vocational, is most profitable. We argue that the answers to these questions are linked through the shape of the earnings function and the importance of firm effects. High levels of academic education have far higher returns than those available either from vocational or lower levels of academic. However at lower levels the vocational return can exceed the academic.

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File URL: http://www.csae.ox.ac.uk/workingpapers/pdfs/2008-07text.pdf
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Bibliographic Info

Paper provided by Centre for the Study of African Economies, University of Oxford in its series CSAE Working Paper Series with number 2008-07.

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Date of creation: 2008
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Handle: RePEc:csa:wpaper:2008-07

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Keywords: Vocational and General education in Tanzania; manufacturing; training.;

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References

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  1. Francis Teal & Geeta Kingdon & Justin Sandefur, 2005. "Labor Market Flexibility, Wages and Incomes in sub-Saharan Africa in the 1990s," Economics Series Working Papers GPRG-WPS-030, University of Oxford, Department of Economics.
  2. Duraisamy, P., 2000. "Changes in Returns to Education in India, 1983-94: By Gender, Age-Cohort and Location," Papers 815, Yale - Economic Growth Center.
  3. Psacharopoulos, George, 1993. "Returns to investment in education : a global update," Policy Research Working Paper Series 1067, The World Bank.
  4. David Card, 2000. "Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems," NBER Working Papers 7769, National Bureau of Economic Research, Inc.
  5. M�ns Söderbom & Francis Teal & Anthony Wambugu & Godius Kahyarara, 2006. "The Dynamics of Returns to Education in Kenyan and Tanzanian Manufacturing," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 68(3), pages 261-288, 06.
  6. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, in: Schooling, Experience, and Earnings, pages 1-4 National Bureau of Economic Research, Inc.
  7. Shoshana Neuman & Adrian Ziderman, 1991. "Vocational Schooling, Occupational Matching, and Labor Market Earnings in Israel," Journal of Human Resources, University of Wisconsin Press, vol. 26(2), pages 256-281.
  8. De Beyer, Joy, 1990. "The incidence and impact on earnings of formal training provided by enterprises in Kenya and Tanzania," Economics of Education Review, Elsevier, vol. 9(4), pages 321-330, December.
  9. Kathleen Burke & Kathleen Beegle, 2004. "Why Children Aren't Attending School: The Case of Northwestern Tanzania," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 13(2), pages 333-355, June.
  10. 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.
  11. Tansel, Aysit, 1994. "Wage employment, earnings and returns to schooling for men and women in Turkey," Economics of Education Review, Elsevier, vol. 13(4), pages 305-320.
  12. Soderbom, Mans & Teal, Francis & Wambugu, Anthony, 2005. "Unobserved heterogeneity and the relation between earnings and firm size: evidence from two developing countries," Economics Letters, Elsevier, vol. 87(2), pages 153-159, May.
  13. 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.
  14. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, May.
  15. Geeta Gandhi Kingdon & Jeemol Unni, 2001. "Education and Women's Labour Market Outcomes in India," Education Economics, Taylor & Francis Journals, vol. 9(2), pages 173-195.
  16. Marcel Fafchamps & Måns Söderbom & Najy Benhassine, 2006. "Job Sorting in African Labor Markets," CSAE Working Paper Series 2006-02, Centre for the Study of African Economies, University of Oxford.
  17. Neuman, Shoshana & Ziderman, Adrian, 1991. "Vocational schooling, occupational matching, and labor market earnings in Israel," Policy Research Working Paper Series 683, The World Bank.
  18. Paul Bennell, 1996. "General versus vocational secondary education in developing countries: A review of the rates of return evidence," Journal of Development Studies, Taylor & Francis Journals, vol. 33(2), pages 230-247.
  19. Moenjak, Thammarak & Worswick, Christopher, 2003. "Vocational education in Thailand: a study of choice and returns," Economics of Education Review, Elsevier, vol. 22(1), pages 99-107, February.
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Citations

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Cited by:
  1. Newhouse, David & Suryadarma, Daniel, 2009. "The value of vocational education : high school type and labor market outcomes in Indonesia," Policy Research Working Paper Series 5035, The World Bank.
  2. Herrera, Santiago & Badr, Karim, 2011. "Why does the productivity of education vary across individuals in Egypt ? firm size, gender, and access to technology as sources of heterogeneity in returns to education," Policy Research Working Paper Series 5740, The World Bank.
  3. Carla Haelermans & Lex Borghans, 2012. "Wage Effects of On-the-Job Training: A Meta-Analysis," British Journal of Industrial Relations, London School of Economics, vol. 50(3), pages 502-528, 09.
  4. Calvès, Anne E. & Kobiané, Jean-François & N’Bouké, Afiwa, 2013. "Privatization of Education and Labor Force Inequality in Urban Francophone Africa: The Transition from School to Work in Ouagadougou," World Development, Elsevier, vol. 47(C), pages 136-148.
  5. Christophe Muller & Christophe J. Nordman, 2012. "Wages and On-the-Job Training in Tunisia," Working Papers halshs-00793383, HAL.
  6. Haelermans Carla & Borghans Lex, 2011. "Wage effects of on-the-job training. A meta-analysis," ROA Research Memorandum 011, Maastricht University, Research Centre for Education and the Labour Market (ROA).
  7. Haelermans Carla & Borghans Lex, 2011. "Wage effects of on-the-job training; a meta-analysis," Research Memorandum 054, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).

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