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Does Education Play a Role in Explaining the Rural‒Urban Wealth Gap? Evidence from Tanzania

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  • Mafie, Gabriel K.
  • Hahn, Youjin
  • Yang, Hee-Seung

Abstract

This paper examines factors that determine differences in living standards as measured by a wealth index between rural and urban areas in Tanzania, by applying theBlinde r‒Oaxaca decomposition method. The rural‒urban wealth gap has remained largely unchanged over time while rural‒urban differences in educational attainment play a significant role in explaining this gap. Further evidence shows that the wealth gap caused by a differential return to education is also significant. Our results stress theimportanceof improving thequality and quantity of education in rural Tanzania in attempting to decrease the rural‒urban wealth gap.

Suggested Citation

  • Mafie, Gabriel K. & Hahn, Youjin & Yang, Hee-Seung, 2021. "Does Education Play a Role in Explaining the Rural‒Urban Wealth Gap? Evidence from Tanzania," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 62(2), pages 162-177, December.
    • Handle: RePEc:hit:hitjec:v:62:y:2021:i:2:p:162-177
    DOI: 10.15057/hje.2021008
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    More about this item

    Keywords

    Education; Oaxaca decomposition; rural‒urban difference; Tanzania; wealth gap;
    All these keywords.

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • I2 - Health, Education, and Welfare - - Education
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies

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