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Heterogeneity in returns to schooling: Econometric evidence from Ethiopia

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  • Sourafel Girma
  • Abbi Kedir

Abstract

This paper investigates whether returns to schooling in Ethiopia vary across the wage distribution of individuals. To do so, it adopts an instrumental variables quantile regression framework that allows for both endogeneity of schooling resulting from unmeasured ability, and possible heterogeneity in the impact of schooling. The empirical estimates indicate that education contributes more to the earnings of individuals at a lower end of the income distribution.

Suggested Citation

  • Sourafel Girma & Abbi Kedir, 2005. "Heterogeneity in returns to schooling: Econometric evidence from Ethiopia," Journal of Development Studies, Taylor & Francis Journals, vol. 41(8), pages 1405-1416.
    • Handle: RePEc:taf:jdevst:v:41:y:2005:i:8:p:1405-1416
    DOI: 10.1080/00220380500187026
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    References listed on IDEAS

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    1. Krishnan, Pramila, 1996. "Family Background, Education and Employment in Urban Ethiopia," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 58(1), pages 167-183, February.
    2. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
    3. Bauer, Thomas & Dross, Patrick J & Haisken-DeNew, John P, 2002. "Sheepskin Effects in Japan," CEPR Discussion Papers 3609, C.E.P.R. Discussion Papers.
    4. Psacharopoulos, George, 1994. "Returns to investment in education: A global update," World Development, Elsevier, vol. 22(9), pages 1325-1343, September.
    5. Card, David, 2001. "Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems," Econometrica, Econometric Society, vol. 69(5), pages 1127-1160, September.
    6. Griliches, Zvi, 1977. "Estimating the Returns to Schooling: Some Econometric Problems," Econometrica, Econometric Society, vol. 45(1), pages 1-22, January.
    7. Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863 Elsevier.
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    Cited by:

    1. Hanjra, Munir A. & Ferede, Tadele & Gutta, Debel Gemechu, 2009. "Reducing poverty in sub-Saharan Africa through investments in water and other priorities," Agricultural Water Management, Elsevier, vol. 96(7), pages 1062-1070, July.
    2. Bernard, Tanguy & Dercon, Stefan & Taffesse, Alemayehu Seyoum, 2011. "Beyond fatalism: An empirical exploration of self-efficacy and aspirations failure in Ethiopia," IFPRI discussion papers 1101, International Food Policy Research Institute (IFPRI).
    3. Darío Maldonado, 2007. "The Design Of Optimal Education Policies When Individuals Differ In Inheritedwealth And Ability," ENSAYOS SOBRE POLÍTICA ECONÓMICA, BANCO DE LA REPÚBLICA - ESPE, vol. 25(55), pages 84-108, December.
    4. Harry Patrinos & Cristobal Ridao-Cano & Chris Sakellariou, 2009. "A note on schooling and wage inequality in the public and private sector," Empirical Economics, Springer, vol. 37(2), pages 383-392, October.
    5. Samuel Perlo-Freeman & Don J. Webber, 2009. "Basic Needs, Government Debt and Economic Growth," The World Economy, Wiley Blackwell, vol. 32(6), pages 965-994, June.
    6. Darío Maldonado, 2008. "Education policies and optimal taxation," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 15(2), pages 131-143, April.
    7. Morrissey Oliver & Kavuma Susan Namirembe & Upward Richard, 2015. "Private Returns to Education for Wage-employees and the Self-employed in Uganda," WIDER Working Paper Series 021, World Institute for Development Economic Research (UNU-WIDER).
    8. repec:eee:wdevel:v:96:y:2017:i:c:p:474-489 is not listed on IDEAS
    9. Fasih, Tazeen & Kingdon, Geeta & Patrinos, Harry Anthony & Sakellariou, Chris & Soderbom, Mans, 2012. "Heterogeneous returns to education in the labor market," Policy Research Working Paper Series 6170, The World Bank.

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