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The Returns to Education in Rwanda

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  • Gérard Lassibille
  • Jee-Peng Tan

Abstract

Based on data from the 1999--2001 Household Living Conditions Survey conducted by the Ministry of Finance and Economic Planning, we estimate wage equations for employees in Rwanda, treating the choice of employment sector as an endogenous process and making separate estimates for workers in the modern and traditional sectors of the economy. The results show that returns to education increase with the level of education, contrary to the pattern typically reported in the literature and that the returns to higher education is particularly high in Rwanda. A noteworthy feature in the results is that the returns to education are quite different across sectors of employment. In the informal sector, the returns to primary education and those to vocational and secondary general education exceed by a relatively large margin, the returns to the corresponding levels of education in the modern sector. A decomposition of the wage differentials across sectors of employment indicate that personal endowments, particularly in terms of educational attainment, are more important in accounting for the wage gaps, than are the difference in their impact on earnings. Copyright 2005, Oxford University Press.

Suggested Citation

  • Gérard Lassibille & Jee-Peng Tan, 2005. "The Returns to Education in Rwanda," Journal of African Economies, Centre for the Study of African Economies, vol. 14(1), pages 92-116, March.
    • Handle: RePEc:oup:jafrec:v:14:y:2005:i:1:p:92-116
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    Cited by:

    1. Sam Jones & Thomas Pave Sohnesen & Neda Trifkovic, 2023. "Educational expansion and shifting private returns to education: Evidence from Mozambique," Journal of International Development, John Wiley & Sons, Ltd., vol. 35(6), pages 1407-1428, August.
    2. Facundo Quiroga‐Martínez & Esteban Fernández‐Vázquez, 2021. "Education as a key to reduce spatial inequalities and informality in Argentinean regional labour markets," Regional Science Policy & Practice, Wiley Blackwell, vol. 13(1), pages 177-189, February.
    3. Paolo Brunori & Flaviana Palmisano & Vitorocco Peragine, 2019. "Inequality of opportunity in sub-Saharan Africa," Applied Economics, Taylor & Francis Journals, vol. 51(60), pages 6428-6458, December.
    4. Uwaifo Oyelere, Ruth, 2010. "Africa's education enigma? The Nigerian story," Journal of Development Economics, Elsevier, vol. 91(1), pages 128-139, January.
    5. Celeste K. Carruthers & Christopher Jepsen, 2020. "Vocational Education: An International Perspective," CESifo Working Paper Series 8718, CESifo.
    6. Uwaifo, Ruth, 2006. "Africa's Education Enigma? The Nigerian story," 2006 Annual meeting, July 23-26, Long Beach, CA 21254, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    7. Livini Donath & Oliver Morrissey & Trudy Owens, 2022. "Universal primary education and household welfare in Tanzania," Discussion Papers 2022-02, University of Nottingham, CREDIT.
    8. Gundersen, Sara, 2016. "Disappointing returns to education in Ghana: A test of the robustness of OLS estimates using propensity score matching," International Journal of Educational Development, Elsevier, vol. 50(C), pages 74-89.
    9. Tillmann Heidelk, 2019. "The Returns to Education in the Context of a Natural Disaster: Evidence from the 2010 Earthquake in Haiti," Working Papers ECARES 2019-17, ULB -- Universite Libre de Bruxelles.
    10. Girsberger, Esther Mirjam, 2017. "Migration, Education and Work Opportunities," IZA Discussion Papers 11028, Institute of Labor Economics (IZA).

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