Returns to Education and Male-Female Wage Differential in Ethiopia: An Analysis of Urban Household Survey
No Thumbnail Available
Date
1998-05
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
A.A.U
Abstract
The main objectives of this study are to estimate and analyse the private returns to education
and to look into the existence of gender discrimination in the Ethiopian Lab our Market. The
methodologies used to that end are the OLS, the Heckman's two-step and the MLE two-step
Procedures.
The main findings of the study are the following . Educational investment is paying to an
individual. One year of additional schooling, primary, secondary and higher education is
found to have a return of 10, 5, 10.6 and 31 percent respectively. These estimates show that
the private return to primary education is the lowest. No significant difference is observed
between the private returns to males and females indicating that the existing disparity in
enrolments is not explained by returns to education. Family background in the form of
maternal education has been found to have significant impact on chldren's earnings implying
that females' education has trans generational effect. The observed wage differential in the
Ethiopian Labour Market is mostly explained by differences in productivity enhancing
attributes rather than by discrimination.
There are important policy implications to be drawn. Mere expansion of primary education
may not result in improving the living standards and efforts should be made to revitalise its
quality and relevance to the world of work. The government's intention to introduce costs haring
arrangements at higher education is an optimal policy response to existing economic
incentives. Improving female enrolments not only will reduce the wage differential between
males and females but will also have a long-run economic benefit. So, resources should be
committed to that end.
Description
Keywords
Education and Male-Female, Differential in Ethiopia