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South Africa’s economics of education: A stocktaking and an agenda for the way forward


  • Martin Gustafsson

    () (Department of Economics, University of Stellenbosch)

  • Thabo Mabogoane

    () (Jet Education Services, Johannesburg)


The paper reviews some of the existing economics of education literature from the perspective of South Africa’s education policymaking needs. It also puts forward a suggested research agenda for future work. The review is arranged according to five key areas of analysis: rates of return, production functions, teacher incentives, benefit incidence, cross-country comparisons. Whilst benefit incidence analysis is able to demonstrate large improvements in the equity of public financing, cross-county comparisons reveal that not only is quality inequitably distributed, it is overall well below what the country’s level of development would predict. Production functions, especially if translated to cost effectiveness models, can point to important policy solutions. Rates of return are difficult for policymakers to interpret, and need to be viewed in the context of qualifications. Teacher incentives is a policy area that is badly in need of a better theoretical and empirical basis.

Suggested Citation

  • Martin Gustafsson & Thabo Mabogoane, 2010. "South Africa’s economics of education: A stocktaking and an agenda for the way forward," Working Papers 06/2010, Stellenbosch University, Department of Economics.
  • Handle: RePEc:sza:wpaper:wpapers105

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    References listed on IDEAS

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    Cited by:

    1. Fabrice Murtin & Thomas Laurent & Geoff Barnard & Dean Janse van Rensburg & Vijay Reddy & George Frempong & Lolita Winnaar, 2015. "Policy Determinants of School Outcomes under Model Uncertainty: Evidence from South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 83(3), pages 317-334, September.

    More about this item


    Economics of education; South Africa; education policy; rates of return; production functions; teacher incentives; benefit-incidence analysis;

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy

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