Learning; Earning in Africa: Where are the Returns to Education High?
This paper investigates the role of learning - through formal schooling and time spent in the labor market - in explaining labor market outcomes of urban workers in Ghana and Tanzania.� We investigate these issues using a new data set measuring incomes of both formal sector wage workers and the self-employed in the informal sector.� In both countries we find significant, convex returns to education and large earnings differentials between sectors when we pool the data and do not control for selection.� In Ghana there is a particularly steep age-earnings profile.� We investigate how far a Harris-Todaro model of market segmentation or a Roy model of selection can explain the patterns oberved in the data.� We find highly significant differences across occupations and important effects from selection in both countries.� The data is consistent with a pattern by which higher ability individuals queue for the high wage formal sector jobs such that the age earnings profile is convex for the self-employed in Ghana once we control for selection.� The returns to education are far higher in the large firm sector than in others and in this sector they are linear not convex.� In both countries there is clear evidence of convexity in the returns to education for the self-employed and here the average returns are low.
|Date of creation:||01 Jan 2010|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.economics.ox.ac.uk/
More information through EDIRC
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.:
- Schmertmann, Carl P., 1994. "Selectivity bias correction methods in polychotomous sample selection models," Journal of Econometrics, Elsevier, vol. 60(1-2), pages 101-132.
- Geeta Kingdon & Justin Sandefur & Francis Teal, 2006.
"Labour Market Flexibility, Wages and Incomes in Sub‐Saharan Africa in the 1990s,"
African Development Review,
African Development Bank, vol. 18(3), pages 392-427.
- Francis Teal & Geeta Kingdon & Justin Sandefur, 2005. "Labor Market Flexibility, Wages and Incomes in sub-Saharan Africa in the 1990s," Economics Series Working Papers GPRG-WPS-030, University of Oxford, Department of Economics.
- Dubin, Jeffrey A & McFadden, Daniel L, 1984. "An Econometric Analysis of Residential Electric Appliance Holdings and Consumption," Econometrica, Econometric Society, vol. 52(2), pages 345-62, March.
- Jolliffe, Dean, 1998. "Skills, Schooling, and Household Income in Ghana," World Bank Economic Review, World Bank Group, vol. 12(1), pages 81-104, January.
- Soderbom, Mans & Teal, Francis & Wambugu, Anthony, 2005. "Unobserved heterogeneity and the relation between earnings and firm size: evidence from two developing countries," Economics Letters, Elsevier, vol. 87(2), pages 153-159, May.
- Justin Sandefur & Pieter Serneels, 2006. "African poverty through the lens of labor economics: Earnings & mobility in three countries," Economics Series Working Papers GPRG-WPS-060, University of Oxford, Department of Economics.
When requesting a correction, please mention this item's handle: RePEc:oxf:wpaper:csae-wps/2010-02. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Caroline Wise)
If references are entirely missing, you can add them using this form.