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An Update of the Returns to Education in Kenya: Accounting both endogeneity and sample selection biases

Author

Listed:
  • Kentaro Shimada

    (Graduate School of International Cooperation Studies, Kobe University)

  • Zeba Khan

    (Faculty of Social Science, Chinese University of Hong Kong)

  • Suguru Mizunoya

    (Faculty of Social Science (Global Studies), Chinese University of Hong Kong)

  • Ayako Wakano

    (Graduate School of Economics, Osaka University)

Abstract

The study is latest to estimate returns to education after the introduction of free primary education in 2003 in Kenya, simultaneously addressing two sources of biases due to endogeneity of schooling and earnings, and sample selection. Using the 2005-2006 Kenya Integrated Household and Budget Survey, the paper finds that (a) returns to additional year of schooling are 14.9% for males and 13.5% for females with a continuous education variable, but the returns to females are consistently higher than males when returns are estimated by level of education, (b) returns to education increases for higher levels of education i.e., the classical pattern of diminishing return to schooling does not hold true for both males and females in Kenya, and (c) the use of joint IV-Heckman method adjust the endogeneity and sample selection biases introduced by OLS and IV.

Suggested Citation

  • Kentaro Shimada & Zeba Khan & Suguru Mizunoya & Ayako Wakano, 2016. "An Update of the Returns to Education in Kenya: Accounting both endogeneity and sample selection biases," Discussion Papers in Economics and Business 16-18, Osaka University, Graduate School of Economics.
    • Handle: RePEc:osk:wpaper:1618
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    File URL: http://www2.econ.osaka-u.ac.jp/library/global/dp/1618.pdf
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    References listed on IDEAS

    as
    1. Mahdi Barouni & Stijn Broecke, 2014. "The Returns to Education in Africa: Some New Estimates," Journal of Development Studies, Taylor & Francis Journals, vol. 50(12), pages 1593-1613, December.
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    More about this item

    Keywords

    Returns to Education; Education Policy; Human Capital; Gender; Kenya;
    All these keywords.

    JEL classification:

    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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