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Real Wages and Returns to Human Capital in Kenya Manufacturing firms

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Author Info
Wambugu, Anthony (Department of Economics, School of Economics and Commercial Law, Göteborg University)
Abstract

This paper studies how real wages and wage returns to human capital in Kenya manufacturing firms changed, using cross-section data sets from a survey conducted in 1993, 1994, 1995, and 2000. A quantile regression technique is used to examine how the impact of human capital varies across the conditional wage distribution. The study found that between 1993 and 2000, the real wage, standardized for observable human capital characteristics increased, while returns to education appear to have been stable. Returns to education are highest for workers educated to advanced levels of education at all quartiles. Moreover, workers at the extreme top of the wage distribution have the highest returns to education while workers at the extreme bottom of the wage distribution have the lowest returns to education. This suggests that at each level of education, unmeasured factors compliment schooling in wage determination. Other dimensions of human capital such as tenure in current firm and worker’s age are also significantly correlated with wages.

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File URL: http://hdl.handle.net/2077/2769
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Publisher Info
Paper provided by Göteborg University, Department of Economics in its series Working Papers in Economics with number 75.

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Length: 30 pages
Date of creation: 20 Jun 2002
Date of revision:
Handle: RePEc:hhs:gunwpe:0075

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Postal: Department of Economics, School of Business, Economics and Law, Göteborg University Box 640, SE 405 30 GÖTEBORG, Sweden
Phone: 031-773 10 00
Web page: http://www.handels.gu.se/econ/
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Related research
Keywords: Quantile regression; returns to schooling; Kenya;

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Find related papers by JEL classification:
J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General

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References listed on IDEAS
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. Temple, Jonathan R. W., 2001. "Generalizations that aren't? Evidence on education and growth," European Economic Review, Elsevier, vol. 45(4-6), pages 905-918, May. [Downloadable!] (restricted)
  2. 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)
  3. Soderbom, M. & Teal, F., 2001. "Firm Size and Human Capital as Determinants of Productivity and Earnings," Working Papers Series 2001-9, Centre for the Study of African Economies, University of Oxford.
  4. Appleton, S. & Balihuta, A., 1996. "Education and Agricultural Productivity: Evidence from Ouganda," Working Papers Series 96-5, Centre for the Study of African Economies, University of Oxford.
    Other versions:
  5. Willis, Robert J., 1987. "Wage determinants: A survey and reinterpretation of human capital earnings functions," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 1, chapter 10, pages 525-602 Elsevier. [Downloadable!] (restricted)
  6. Schultz, Theodore W, 1975. "The Value of the Ability to Deal with Disequilibria," Journal of Economic Literature, American Economic Association, vol. 13(3), pages 827-46, September. [Downloadable!] (restricted)
  7. Lam, David & Schoeni, Robert F, 1993. "Effects of Family Background on Earnings and Returns to Schooling: Evidence from Brazil," Journal of Political Economy, University of Chicago Press, vol. 101(4), pages 710-40, August. [Downloadable!] (restricted)
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  8. Simon Appleton & John Hoddinott & John MacKinnon, 1996. "Education and health in sub-Saharan Africa," Journal of International Development, John Wiley & Sons, Ltd., vol. 8(3), pages 307-339.
  9. Pritchett, Lant, 1996. "Where has all the education gone?," Policy Research Working Paper Series 1581, The World Bank. [Downloadable!]
  10. Colm Harmon & Hessel Oosterbeek, 2000. "The Returns to Education: A Review of Evidence, Issues and Deficiencies in the Literature," CEE Discussion Papers 0005, Centre for the Economics of Education, LSE. [Downloadable!]
  11. Weir, S. & Knight, J., 2000. "Education Externalities in Rural Ethiopia: Evidence from Average and Stochastic Frontier Production Functions," Working Papers Series 2000-4, Centre for the Study of African Economies, University of Oxford.
  12. Manda , Damiano Kulundu & Bigsten, Arne & Mwabu , Germano, 2001. "Trade Union Membership and Earnings in Kenyan Manufacturing Firms," Working Papers in Economics 50, Göteborg University, Department of Economics. [Downloadable!]
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  13. 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)
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Cited by:
(explanations, 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. Giovagnoli, Paula Ines & Fiszbein, Ariel & Patrinos, Harry Anthony, 2005. "Estimating the returns to education in Argentina : 1992-2002," Policy Research Working Paper Series 3715, The World Bank. [Downloadable!]
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