Modelling cognitive skills, ability and school quality to explain labour market earnings differentials
AbstractAttempts to explain wage differences between race groups in South Africa are constrained by the fact that quality of education is known to differ greatly between groups, thus the unexplained portion of the wage gap may be much affected by such differences in education quality. Using a simulation model that utilises school-leaving (matric) examination results and educational attainment levels to generate estimates of education quality, we find that much of the wage gap can indeed be explained by differences in education quality. Thus the unexplained residual, often identified with labour market discrimination, usually greatly over-estimates such discrimination. This emphasises even more strongly the need for greater equity in educational outcomes, particularly in the often unobserved quality of education.
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Bibliographic InfoPaper provided by Stellenbosch University, Department of Economics in its series Working Papers with number 08/2011.
Date of creation: 2011
Date of revision:
South Africa; education quality; wages; labour market; Oaxaca-Blinder decomposition; discrimination; economics of education;
Find related papers by JEL classification:
- J7 - Labor and Demographic Economics - - Labor Discrimination
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
This paper has been announced in the following NEP Reports:
- NEP-AFR-2011-04-09 (Africa)
- NEP-ALL-2011-04-09 (All new papers)
- NEP-CBE-2011-04-09 (Cognitive & Behavioural Economics)
- NEP-CMP-2011-04-09 (Computational Economics)
- NEP-EDU-2011-04-09 (Education)
- NEP-LAB-2011-04-09 (Labour Economics)
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.:
- Servaas van der Berg & Louise Wood & Neil le Roux, 2002. "Differentiation in black education," Development Southern Africa, Taylor & Francis Journals, vol. 19(2), pages 289-306.
- Nicola Branson & Julia Garlick & David Lam & Murray Leibbrandt, 2012. "Education and Inequality: The South African Case," SALDRU Working Papers 75, Southern Africa Labour and Development Research Unit, University of Cape Town.
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