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Does Doing an Apprenticeship Pay Off? Evidence from Ghana

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  • Courtney Monk
  • Justin Sandefur
  • Francis Teal

Abstract

In Ghana there is a highly developed apprenticeship system where young men and women undertake sector-specific private training, which yields skills used primarily in the informal sector. In this paper we use a 2006 urban based household survey with detailed questions on the background, training and earnings of workers in both wage and self-employment to ask whether apprenticeship pays off. We show that apprenticeship is by far the most important institution providing training and is undertaken primarily by those with junior high school or lower levels of education. The summary statistics indicate that those who have done an apprenticeship earn much less than those who have not. This suggests that endogenous selection into the apprenticeship system is important, and we take several measures to address this issue. We find a significant amount of heterogeneity in the returns to apprenticeship across education. Our most conservative estimates imply that for currently employed people, who did apprenticeships but have no formal education, the training increases their earnings by 50%. However this declines as education levels rise. We argue that our results are consistent with those who enter apprenticeship with no education having higher ability than those who enter with more education.

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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 2008-08.

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Date of creation: 2008
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Handle: RePEc:csa:wpaper:2008-08

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Keywords: Apprenticeship; Africa; Training; Treatment; Control function;

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References

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  1. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, National Bureau of Economic Research, Inc, in: Schooling, Experience, and Earnings, pages 1-4 National Bureau of Economic Research, Inc.
  2. Jones, Patricia, 2001. "Are educated workers really more productive?," Journal of Development Economics, Elsevier, Elsevier, vol. 64(1), pages 57-79, February.
  3. James J. Heckman, 1977. "Dummy Endogenous Variables in a Simultaneous Equation System," NBER Working Papers 0177, National Bureau of Economic Research, Inc.
  4. Francis Teal & Geeta Kingdon & Justin Sandefur, 2005. "Labor Market Flexibility, Wages and Incomes in sub-Saharan Africa in the 1990s," Economics Series Working Papers, University of Oxford, Department of Economics GPRG-WPS-030, University of Oxford, Department of Economics.
  5. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, National Bureau of Economic Research, Inc, number minc74-1.
  6. Frazer, Garth, 2006. "Learning the master's trade: Apprenticeship and human capital in Ghana," Journal of Development Economics, Elsevier, Elsevier, vol. 81(2), pages 259-298, December.
  7. Card, David, 2001. "Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems," Econometrica, Econometric Society, Econometric Society, vol. 69(5), pages 1127-60, September.
  8. Rosholm, Michael & Nielsen, Helena Skyt & Dabalen, Andrew, 2007. "Evaluation of training in African enterprises," Journal of Development Economics, Elsevier, Elsevier, vol. 84(1), pages 310-329, September.
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Cited by:
  1. Biavaschi, Costanza & Eichhorst, Werner & Giulietti, Corrado & Kendzia, Michael J. & Muravyev, Alexander & Pieters, Janneke & Rodríguez-Planas, Núria & Schmidl, Ricarda & Zimmermann, Klaus F., 2012. "Youth Unemployment and Vocational Training," IZA Discussion Papers 6890, Institute for the Study of Labor (IZA).
  2. Francis Teal & Nicholas Nsowah-Nuamah and Moses Awoonor-Williams, 2010. "Jobs, Skills and Incomes in Ghana: How was poverty halved?," Economics Series Working Papers, University of Oxford, Department of Economics CSAE WPS/2010-01, University of Oxford, Department of Economics.
  3. Langthaler, Margarita, 2013. "Die entwicklungspolitischen Wirkungen von Bildung: Rezente Forschungsergebnisse und ihre Implikationen für die Entwicklungszusammenarbeit," Policy Notes, Österreichische Forschungsstiftung für Internationale Entwicklung (ÖFSE) / Austrian Foundation for Development Research 04/2013, Österreichische Forschungsstiftung für Internationale Entwicklung (ÖFSE) / Austrian Foundation for Development Research.
  4. Cho, Yoonyoung & Kalomba, Davie & Mobarak, Ahmed Mushfiq & Orozco, Victor, 2013. "Gender differences in the effects of vocational training : constraints on women and drop-out behavior," Policy Research Working Paper Series, The World Bank 6545, The World Bank.
  5. Szirmai, Adam & Gebreeyesus, Mulu & Guadagno, Francesca & Verspagen, Bart, 2013. "Promoting productive employment in Sub-Saharan Africa: A review of the literature," MERIT Working Papers, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT) 062, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  6. Eichhorst, Werner & Rodríguez-Planas, Núria & Schmidl, Ricarda & Zimmermann, Klaus F., 2012. "A Roadmap to Vocational Education and Training Systems Around the World," IZA Discussion Papers 7110, Institute for the Study of Labor (IZA).
  7. Rankin, Neil & Roberts, Gareth & Schoer, Volker, 2014. "The success of learnerships? Lessons from South Africa.s training and education programme," Working Paper Series, World Institute for Development Economic Research (UNU-WIDER) UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).

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