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Is Education More Benficial to the Less Able? Eocnometric Evidence from Ethiopia

Author

Listed:
  • Sourafel Girma
  • Abbi Kedir

Abstract

The paper investigates whether returns to schooling in Ethiopia vary according to the ability 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 the less able individuals, consistent with the notion that education and ability are substitutes. By contrast, the relatively low (but still economically significant) returns to education at the higher end of the conditional earnings distribution suggest the importance of inherent ability or personal connections in securing high paying jobs.

Suggested Citation

  • Sourafel Girma & Abbi Kedir, 2003. "Is Education More Benficial to the Less Able? Eocnometric Evidence from Ethiopia," Discussion Papers in Economics 03/1, Division of Economics, School of Business, University of Leicester.
    • Handle: RePEc:lec:leecon:03/1
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    File URL: https://www.le.ac.uk/economics/research/RePEc/lec/leecon/econ03-1.pdf
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    References listed on IDEAS

    as
    1. Omar Arias & Walter Sosa-Escudero & Kevin F. Hallock, 2001. "Individual heterogeneity in the returns to schooling: instrumental variables quantile regression using twins data," Empirical Economics, Springer, vol. 26(1), pages 7-40.
    2. 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.
    3. Roger Koenker & Kevin F. Hallock, 2001. "Quantile Regression," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 143-156, Fall.
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    Cited by:

    1. Aysit Tansel & Fatma Bircan Bodur, 2012. "Wage Inequality and Returns to Education in Turkey: A Quantile Regression Analysis," Review of Development Economics, Wiley Blackwell, vol. 16(1), pages 107-121, February.
    2. Harry Anthony Patrinos & Chris Sakellariou, 2006. "Economic volatility and returns to education in Venezuela: 1992-2002," Applied Economics, Taylor & Francis Journals, vol. 38(17), pages 1991-2005.
    3. Chris Sakellariou, 2005. "Profitability of Vocational vs. Formal Education for Men and Women in Singapore Using Quantile Regressions," Economic Growth Centre Working Paper Series 0502, Nanyang Technological University, School of Social Sciences, Economic Growth Centre.
    4. Chris Sakellariou, 2005. "Heterogeneity in the Returns to Education and Experience: Evidence from a High and a Low Income S.E. Asian Country," Economic Growth Centre Working Paper Series 0501, Nanyang Technological University, School of Social Sciences, Economic Growth Centre.
    5. Patrinos, Harry Anthony & Ridao-Cano, Cris & Sakellariou, Chris, 2006. "Estimating the returns to education : accounting for heterogeneity in ability," Policy Research Working Paper Series 4040, The World Bank.
    6. World Bank, 2007. "Ethiopia : Urban Labor Markets, Challenges and Prospects, Volume 1. Synthesis Report," World Bank Publications - Reports 8011, The World Bank Group.

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    More about this item

    Keywords

    returns to schooling; quantile regression;

    JEL classification:

    • I2 - Health, Education, and Welfare - - Education
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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