IDEAS home Printed from https://ideas.repec.org/p/hhs/gunwpe/0076.html
   My bibliography  Save this paper

Family Background, Education and Earnings in Kenya

Author

Listed:
  • Wambugu, Anthony

    (Department of Economics, School of Economics and Commercial Law, Göteborg University)

Abstract

This paper uses data collected in 2000 to first estimate OLS and ordered probit models to measure correlation between family background and workers’ education. Then, human capital earnings functions are estimated to examine to what extent family background accounts for observed correlation between workers’ education and earnings. Subsequently, it estimates returns to education with education treated as endogenous. Having well-educated parents is associated with greater educational attainment and earnings. Returns to education decline slightly when parents’ education controls are in the earnings function. Instrumental variable estimation or self-selection correction suggests that estimates of returns to education may be larger than conventional estimates suggest.

Suggested Citation

  • Wambugu, Anthony, 2002. "Family Background, Education and Earnings in Kenya," Working Papers in Economics 76, University of Gothenburg, Department of Economics.
  • Handle: RePEc:hhs:gunwpe:0076
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/2077/2852
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Lam, David & Schoeni, Robert F, 1993. "Effects of Family Background on Earnings and Returns to Schooling: Evidence from Brazil," Journal of Political Economy, University of Chicago Press, vol. 101(4), pages 710-740, August.
    2. Krishnan, Pramila, 1996. "Family Background, Education and Employment in Urban Ethiopia," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 58(1), pages 167-183, February.
    3. Willis, Robert J., 1987. "Wage determinants: A survey and reinterpretation of human capital earnings functions," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 1, chapter 10, pages 525-602, Elsevier.
    4. Becker, Gary S & Tomes, Nigel, 1976. "Child Endowments and the Quantity and Quality of Children," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages 143-162, August.
    5. Jere R. Behrman, 1996. "Human capital formation, returns and policies: Analytical approaches and research questions," Journal of International Development, John Wiley & Sons, Ltd., vol. 8(3), pages 341-373.
    6. O. Ashenfelter & D. Card (ed.), 1999. "Handbook of Labor Economics," Handbook of Labor Economics, Elsevier, edition 1, volume 3, number 3.
    7. Geeta Gandhi Kingdon, 1998. "Does the labour market explain lower female schooling in India?," Journal of Development Studies, Taylor & Francis Journals, vol. 35(1), pages 39-65.
    8. Ritva Reinikka & Paul Collier, 2001. "Uganda's Recovery : The Role of Farms, Firms, and Government," World Bank Publications - Books, The World Bank Group, number 13850.
    9. Lee A. Lillard & Robert J. Willis, 1994. "Intergenerational Educational Mobility: Effects of Family and State in Malaysia," Journal of Human Resources, University of Wisconsin Press, vol. 29(4), pages 1126-1166.
    10. repec:eee:labchp:v:1:y:1986:i:c:p:525-602 is not listed on IDEAS
    11. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1.
    12. Levin, Jesse & Plug, Erik J. S., 1999. "Instrumenting education and the returns to schooling in the Netherlands," Labour Economics, Elsevier, vol. 6(4), pages 521-534, November.
    13. Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863, Elsevier.
    14. Uusitalo, Roope, 1999. "Return to education in Finland," Labour Economics, Elsevier, vol. 6(4), pages 569-580, November.
    15. Psacharopoulos, George, 1994. "Returns to investment in education: A global update," World Development, Elsevier, vol. 22(9), pages 1325-1343, September.
    16. Glewwe, Paul, 1996. "The relevance of standard estimates of rates of return to schooling for education policy: A critical assessment," Journal of Development Economics, Elsevier, vol. 51(2), pages 267-290, December.
    17. Blackburn, McKinley L & Neumark, David, 1995. "Are OLS Estimates of the Return to Schooling Biased Downward? Another Look," The Review of Economics and Statistics, MIT Press, vol. 77(2), pages 217-230, May.
    18. Hessel Oosterbeek & Hans van Ophem, 2000. "Schooling choices: Preferences, discount rates, and rates of return," Empirical Economics, Springer, vol. 25(1), pages 15-34.
    19. Angrist, Joshua D & Newey, Whitney K, 1991. "Over-Identification Tests in Earnings Functions with Fixed Effects," Journal of Business & Economic Statistics, American Statistical Association, vol. 9(3), pages 317-323, July.
    20. Bigsten, Arne & Isaksson, Anders & Söderbom, Måns & Collier, Paul & Zeufack, Albert & Dercon, Stefan & Fafchamps, Marcel & Gunning, Jan Willem & Teal, Francis & Appleton, Simon & Gauthier, Bernard & O, 2000. "Rates of Return on Physical and Human Capital in Africa's Manufacturing Sector," Economic Development and Cultural Change, University of Chicago Press, vol. 48(4), pages 801-827, July.
    21. Simon Appleton & John Hoddinott & John MacKinnon, 1996. "Education and health in sub-Saharan Africa," Journal of International Development, John Wiley & Sons, Ltd., vol. 8(3), pages 307-339.
    22. Joshua D. Angrist & Alan B. Keueger, 1991. "Does Compulsory School Attendance Affect Schooling and Earnings?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(4), pages 979-1014.
    23. Becker, Gary S & Tomes, Nigel, 1979. "An Equilibrium Theory of the Distribution of Income and Intergenerational Mobility," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1153-1189, December.
    24. Paul Glewwe & Hanan Jacoby, 1994. "Student Achievement and Schooling Choice in Low-Income Countries: Evidence from Ghana," Journal of Human Resources, University of Wisconsin Press, vol. 29(3), pages 843-864.
    25. Ashenfelter, Orley & Krueger, Alan B, 1994. "Estimates of the Economic Returns to Schooling from a New Sample of Twins," American Economic Review, American Economic Association, vol. 84(5), pages 1157-1173, December.
    26. Jacob A. Mincer, 1974. "Schooling and Earnings," NBER Chapters, in: Schooling, Experience, and Earnings, pages 41-63, National Bureau of Economic Research, Inc.
    27. Dearden, Lorraine, 1999. "The effects of families and ability on men's education and earnings in Britain1," Labour Economics, Elsevier, vol. 6(4), pages 551-567, November.
    28. Tansel, A., 1993. "School Attainnment, Parental Education and Gender in Cote d'Ivoire and Ghana," Papers 692, Yale - Economic Growth Center.
    29. Vella, Francis & Gregory, R. G., 1996. "Selection bias and human capital investment: Estimating the rates of return to education for young males," Labour Economics, Elsevier, vol. 3(2), pages 197-219, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Valdivia, Martín, 2009. "Contracting the Road to Development: Early Impacts of a Rural Roads Program," Research Department working papers 203, CAF Development Bank Of Latinamerica.
    2. Milu Muyanga & John Olwande & Esther Mueni & Stella Wambugu, 2010. "Free Primary Education in Kenya: An Impact Evaluation Using Propensity Score Methods," Working Papers PMMA 2010-08, PEP-PMMA.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mwangi S. Kimenyi & Germano Mwabu & Damiano Kulundu Manda, 2006. "Human Capital Externalities and Private Returns to Education in Kenya," Eastern Economic Journal, Eastern Economic Association, vol. 32(3), pages 493-513, Summer.
    2. Angel de la Fuente & Antonio Ciccone, 2003. "Human capital in a global and knowledge-based economy," UFAE and IAE Working Papers 562.03, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    3. Maluccio, John A., 1998. "Endogeneity of schooling in the wage function," FCND discussion papers 54, International Food Policy Research Institute (IFPRI).
    4. Manuel Salas Velasco, 2004. "Rendimientos privados de las inversiones en educación superior a partir de ecuaciones de ingresos," Hacienda Pública Española / Review of Public Economics, IEF, vol. 169(2), pages 87-117, June.
    5. B. Ben Halima & N. Chusseau & J. Hellier, 2013. "Skill Premia and Intergenerational Skill Transmission: The French Case," Working Papers 285, ECINEQ, Society for the Study of Economic Inequality.
    6. Colm Harmon & Hessel Oosterbeek, 2000. "The Returns to Education: A Review of Evidence, Issues and Deficiencies in the Literature," CEE Discussion Papers 0005, Centre for the Economics of Education, LSE.
    7. Colm Harmon & Hessel Oosterbeek & Ian Walker, 2003. "The Returns to Education: Microeconomics," Journal of Economic Surveys, Wiley Blackwell, vol. 17(2), pages 115-156, April.
    8. Eric A. Hanushek & Ludger Woessmann, 2008. "The Role of Cognitive Skills in Economic Development," Journal of Economic Literature, American Economic Association, vol. 46(3), pages 607-668, September.
    9. Norbert R. Schady, 2003. "Convexity and Sheepskin Effects in the Human Capital Earnings Function: Recent Evidence for Filipino Men," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 65(2), pages 171-196, May.
    10. Ben-Halima, B. & Chusseau, N. & Hellier, J., 2014. "Skill premia and intergenerational education mobility: The French case," Economics of Education Review, Elsevier, vol. 39(C), pages 50-64.
    11. Monazza Aslam, 2006. "Rates of Return to Education by Gender in Pakistan," Economics Series Working Papers GPRG-WPS-064, University of Oxford, Department of Economics.
    12. Justin L. Tobias, 2003. "Are Returns to Schooling Concentrated Among the Most Able? A Semiparametric Analysis of the Ability–earnings Relationships," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 65(1), pages 1-29, February.
    13. Serneels, Pieter & Beegle, Kathleen & Dillon, Andrew, 2017. "Do returns to education depend on how and whom you ask?," Economics of Education Review, Elsevier, vol. 60(C), pages 5-19.
    14. Sofia Cheidvasser, 2000. "The Educated Russian's Curse: Returns to Education in the Russian Federation," Econometric Society World Congress 2000 Contributed Papers 0246, Econometric Society.
    15. Ashenfelter, Orley & Harmon, Colm & Oosterbeek, Hessel, 1999. "A review of estimates of the schooling/earnings relationship, with tests for publication bias," Labour Economics, Elsevier, vol. 6(4), pages 453-470, November.
    16. Ge, Suqin, 2013. "Estimating the returns to schooling: Implications from a dynamic discrete choice model," Labour Economics, Elsevier, vol. 20(C), pages 92-105.
    17. Denis Maguain, 2007. "Les rendements de l'éducation en comparaison internationale," Économie et Prévision, Programme National Persée, vol. 180(4), pages 87-106.
    18. Sonia Bhalotra & Claudia Sanhueza, 2004. "Parametric and Semi-parametric Estimations of the Return to Schooling in South Africa," Econometric Society 2004 Latin American Meetings 294, Econometric Society.
    19. Behrman, Jere R., 2010. "Investment in Education Inputs and Incentives," Handbook of Development Economics, in: Dani Rodrik & Mark Rosenzweig (ed.), Handbook of Development Economics, edition 1, volume 5, chapter 0, pages 4883-4975, Elsevier.
    20. Uwaifo, Ruth, 2006. "Africa's Education Enigma? The Nigerian story," 2006 Annual meeting, July 23-26, Long Beach, CA 21254, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

    More about this item

    Keywords

    Earnings function; return to education; instrumental variables;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hhs:gunwpe:0076. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Jessica Oscarsson (email available below). General contact details of provider: https://edirc.repec.org/data/naiguse.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.