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Heterogeneity in returns to schooling: Econometric evidence from Ethiopia

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  • Sourafel Girma
  • Abbi Kedir

Abstract

This paper investigates whether returns to schooling in Ethiopia vary across the wage distribution of individuals. To do so, it adopts an instrumental variables quantile regression framework that allows for both endogeneity of schooling resulting from unmeasured ability, and possible heterogeneity in the impact of schooling. The empirical estimates indicate that education contributes more to the earnings of individuals at a lower end of the income distribution.

Suggested Citation

  • Sourafel Girma & Abbi Kedir, 2005. "Heterogeneity in returns to schooling: Econometric evidence from Ethiopia," Journal of Development Studies, Taylor & Francis Journals, vol. 41(8), pages 1405-1416.
    • Handle: RePEc:taf:jdevst:v:41:y:2005:i:8:p:1405-1416
    DOI: 10.1080/00220380500187026
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    1. Hanjra, Munir A. & Ferede, Tadele & Gutta, Debel Gemechu, 2009. "Reducing poverty in sub-Saharan Africa through investments in water and other priorities," Agricultural Water Management, Elsevier, vol. 96(7), pages 1062-1070, July.
    2. Sam Jones & Thomas Pave Sohnesen & Neda Trifkovic, 2023. "Educational expansion and shifting private returns to education: Evidence from Mozambique," Journal of International Development, John Wiley & Sons, Ltd., vol. 35(6), pages 1407-1428, August.
    3. Issofou Njifen & Peter Smith, 2024. "Education-Job Mismatch and Heterogeneity in the Return to Schooling: Evidence from Cameroon," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 860-887, March.
    4. Livini Donath & Oliver Morrissey & Trudy Owens, 2021. "Does the pay period matter in estimating returns to schooling? Evidence from East Africa," Discussion Papers 2021-01, University of Nottingham, CREDIT.
    5. Jeyapraba Suresh, 2023. "Poverty is Lack of Capabilities: A Literature Review," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(3), pages 462-476, March.
    6. Fasih, Tazeen & Kingdon, Geeta & Patrinos, Harry Anthony & Sakellariou, Chris & Soderbom, Mans, 2012. "Heterogeneous returns to education in the labor market," Policy Research Working Paper Series 6170, The World Bank.
    7. Darío Maldonado, 2007. "The design of optimal education policies when individuals differ in inherited wealth and ability," Revista ESPE - Ensayos sobre Política Económica, Banco de la Republica de Colombia, vol. 25(55), pages 84-108, December.
    8. Harry Patrinos & Cristobal Ridao-Cano & Chris Sakellariou, 2009. "A note on schooling and wage inequality in the public and private sector," Empirical Economics, Springer, vol. 37(2), pages 383-392, October.
    9. Samuel Perlo‐Freeman & Don J. Webber, 2009. "Basic Needs, Government Debt and Economic Growth," The World Economy, Wiley Blackwell, vol. 32(6), pages 965-994, June.
    10. Yared Seid & Alemayehu Seyoum Taffesse & Seid Nuru Ali, 2015. "Ethiopia—an agrarian economy in transition," WIDER Working Paper Series 154, World Institute for Development Economic Research (UNU-WIDER).
    11. Tanguy Bernard & Stefan Dercon & Alemayehu Seyoum Taffesse, 2011. "Beyond Fatalism - An empirical exploration of self-efficacy and aspirations failure in Ethiopia," CSAE Working Paper Series 2011-03, Centre for the Study of African Economies, University of Oxford.
    12. Oliver Morrissey & Susan Namirembe Kavuma & Richard Upward, 2015. "Private returns to education for wage-employees and the self-employed in Uganda," WIDER Working Paper Series 021, World Institute for Development Economic Research (UNU-WIDER).
    13. Issofou NJIFEN & Aicha PEMBOURA, 2020. "Hétérogénéité dans les rendements de l’éducation au Cameroun : une estimation en présence des biais de sélection et d’endogénéité," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 52, pages 105-126.
    14. Darío Maldonado, 2008. "Education policies and optimal taxation," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 15(2), pages 131-143, April.
    15. Susan Namirembe Kavuma & Oliver Morrissey & Richard Upward, 2015. "Private Returns to Education for Wage-employees and the Self-employed in Uganda," WIDER Working Paper Series wp-2015-021, World Institute for Development Economic Research (UNU-WIDER).
    16. Sam Jones & Thomas Pave Sohnesen & Neda Trifković, 2018. "The evolution of private returns to education during post-conflict transformation: Evidence from Mozambique," WIDER Working Paper Series wp-2018-143, World Institute for Development Economic Research (UNU-WIDER).
    17. Sam Jones & Neda Trifkovic & Thomas Sohnesen, 2018. "The evolution of private returns to education during post-conflict transformation: Evidence from Mozambique," WIDER Working Paper Series 143, World Institute for Development Economic Research (UNU-WIDER).
    18. Dietrich, Stephan & Malerba, Daniele & Barrientos, Armando & Gassmann, Franziska & Mohnen, Pierre & Tirivayi, Nyasha & Kavuma, Susan & Matovu, Fred, 2017. "Social protection investments, human capital, and income growth: Simulating the returns to social cash transfers in Uganda," MERIT Working Papers 2017-029, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    19. Yared Seid & Alemayehu Seyoum Taffesse & Seid Nuru Ali, 2015. "Ethiopia - an agrarian economy in transition," WIDER Working Paper Series wp-2015-154, World Institute for Development Economic Research (UNU-WIDER).
    20. Weldeegzie, Samuel G., 2017. "Growing-up Unfortunate: War and Human Capital in Ethiopia," World Development, Elsevier, vol. 96(C), pages 474-489.

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