Rates of return to education of blacks in South Africa

The aim of this empirical study was to calculate private and social rates of return to education and to test the hypothesis that education is a major determinant of earning differentials for blacks in South Africa. Data for 23 278 working men and women were extracted from the 1985 Current Population Survey files. This comprised a sample representative of the black population in the Republic of South Africa excluding the former Transkei, Bophuthatswana, Venda and Ciskei territories. Lifetime earnings profiles were constructed from these data for five educational levels, namely, no schooling up to Standard 1; Standards 2 to 4; Standards 5 to 7; Standards 8 to 9; and Standard 10. Schooling was assumed to account for 60 per cent of the earnings differentials between these profiles. Imputed average household outlays on schooling were taken as the private direct cost of education. These were supplemented by estimates of per pupil spending by the various government departments responsible for black education, to calculate the social costs per year of primary and secondary schooling. Indirect costs in the form of imputed foregone earnings were included from Standard 5 (age 15) onwards. The private internal rates of return to education of males were found to be about 16 per cent at primary level and 24 per cent for secondary schooling. Corresponding social rates of return are about 6 per cent for primary and 15 per cent for secondary education. Estimates for females showed negative rates of return between no schooling and Standards 2 to 4, the private and social rates being estimated at ‐1 per cent and ‐4 per cent respectively; from Standards 2 to 4 to Standards 5 to 7, a private rate of 12 per cent and a social rate of 4 per cent are reported; and for the remaining secondary school phases private rates of about 32 per cent and social rates of about 15 per cent are estimated. The study confirms that education is a major determinant of earnings differentials and education expansion can be regarded as a powerful earnings equaliser.     

Education and Earnings in Transition: The Case of Lao*

This paper is a study on the returns to education in Lao, a country that has been largely neglected by the published literature. The authors found that the private rates of returns to education have risen significantly with economic transition. In particular, returns for young workers are considerably higher than for older workers. Although large earnings premiums are generally received by workers with high levels of education, the most profitable investment in education for a large number of paid employees is still the primary level. Moreover, there are the significant public–private sector wage differentials. The research findings have important implications for public sector salaries and the financing of education in Lao.     

Hitting the Target: Doubling Primary School Enrollments in Sub-Saharan Africa by 2015

This paper estimates the number of children who will need to attend and complete primary school in sub-Saharan Africa in order for the current international development target of universal primary education (UPE) by 2015 to be attained. In addition, a variety of demand constraints that will also affect the attainment of UPE are identified and assessed. The main conclusion of this analysis is that target enrollment growth for the region as a whole between 2000 and 2015 is not much greater than enrollment growth during the 1990s. For at least half of all countries in the region, however, this will require very high levels of sustained enrollment growth during the next 15 years. There are also major concerns about the overall level of demand for primary education by individuals and households. In particular, formal sector employment contracted in many countries during the 1990s and returns to education in the smallholder agriculture and informal sectors continue to remain low. But, with sufficient commitment from governments and donor agencies to increase educational capacity and improve the quality of schooling, the UPE target can be attained as part of a comprehensive strategy for poverty reduction in each country.     

The Legacy of Serrano: The Impact of Mandated Equal Spending on Private School Enrollment

In Tiebout's idealized world, families would sort into homogeneous communities. Each family would get its preferred quality of public schools and there would be no demand for private schools. But limited public school options and a demand for religious instruction not permitted in public schools create a market for private schooling. Recently, many state governments have greatly limited districts' freedom to spend what they wish on education, often in response to court rulings to equalize education spending, such as Serrano in California. Funding equalization also affects the level of public school spending in the average state district; if this rises, as it has in many states, private schools become less attractive. Examining private school enrollment in 159 metropolitan areas in 1970, 1980, and 1990, we find that private school enrollments fall as average public spending rises and increase as public spending becomes more equal.     

Human capital accumulation in emerging Asia, 1970–2030

Emerging Asian economies have made strong progress in improving educational capital in the past 40 years. High educational attainment, especially at the secondary level, has significantly improved emerging Asia's educational achievement. Regressions show that better parental education and income, lower income inequality, declining fertility, and higher public educational expenditures account for higher educational enrollment. But Asia's average years of schooling are forecast to increase to 7.6 years by 2030, from 7.0, significantly slower than the increase of 4.1 years from 1970 to 2010. That would put emerging Asia's educational capital in 2030 at only the 1970 level of the advanced countries, or still 3.5 years behind the level of advanced countries in 2010. For sustained human development, Asian economies must invest in improving educational quality and raising enrollment rates at the secondary and tertiary levels.     

Immigration,Public Education Spending,and Private Schooling

This article examines the impact of immigration on private school enrollment through the mechanism of public education spending. It finds that the immigrant share of population raises private school enrollment across countries by leading to a decrease in the share of public education spending. The decrease is driven by responses to immigrants from culturally similar and developed countries. This suggests that the role of public schools in promoting social cohesion among diverse populations is weighted against other concerns in education funding decisions in places with immigrant populations. The endogeneity of immigrant share is accounted for by using an instrument constructed from gravity model estimates.     

An Analysis of the Effect of Schooling,Experience and Sex On Earnings in the Government and Private Sectors of Urban Java

The returns to education in Indonesia are analysed using Susenas data. The private sector is found to reward education more generously than the public sector, while the latter puts a premium on experience. A casual analysis suggests general sex discrimination against female workers at any given level of education; however, once experience is allowed for, the negative sex differentials become insignificant. Finally, the general returns to education are of the order of 15–17% additional income for each additional year of schooling, which is a very high rate of return compared with other countries.     

Economic returns to schooling for China's Korean minority

This paper examines economic returns to schooling for China's Korean minority in the urban labour market using ordinary least squares (OLS) and two-stage least squares. The OLS estimates of the returns to schooling are similar to findings from recent studies for the Chinese urban labour market. We use parents’ education and spouse's education to instrument for education as well as exploit heteroskedasticity to aid in identification. The two-stage least squares estimates using parents’ and spouse's education are considerably higher than the OLS estimates for returns to schooling, while the estimates which exploit heteroskedasticity for identification lie between the OLS and conventional two-stage least squares estimates. The economic returns to schooling reported in this study assist in explaining why private demand for education is strong among the ethnic Koreans in China. It also provides a justification for the Korean minority's focus on educational attainment.     

Using Unemployment Rates as Instruments to Estimate Returns to Schooling

I use state unemployment rates during a person's teenage years to estimate the returns to schooling. A higher unemployment rate reduces the opportunity costs of attending school. Using the same 1980 Census data set that Angrist and Krueger (1991) use, I also estimate returns to schooling with a modified version of their quarter‐of‐birth instrument. The estimates from the two‐stage least squares (2SLS) model using the unemployment rate and the model using the quarter‐of‐birth instruments are almost identical. In addition, these 2SLS estimates are larger than the ordinary least squares (OLS) estimates, supporting this counterintuitive, yet prevalent, result in the literature.     

The progress of school education in India

This paper provides an overview of school education in India.First, it places India's educational achievements in internationalperspective, particularly against countries with which it isnow increasingly compared, especially China. Second, the paperexamines schooling access in terms of enrolment and school attendancerates, and schooling quality in terms of literacy rates, learningachievement levels, school resources, and teacher inputs. Third,the paper investigates the role of private schooling in India,examining the extent of growth of private schooling and surveyingevidence on the relative effectiveness and unit costs of privateand public schools. Last, the paper discusses some major publiceducation initiatives. The concluding section suggests a futureresearch agenda and appeals for rigorous evaluation of the impactsand costs of the numerous existing educational interventions,in order to learn about their relative cost-effectiveness forevidence-based policy-making.     

Home Schooling: An Alternative School Choice

There is a fairly large, evolving literature on school choice. This literature addresses the factors that influence the choice between schools in the public and private sectors. Overlooked by this literature, however, is the growing segment of school enrollment in home schools. This article empirically examines the decision to educate children at home. The empirical results suggest that the decision to home school depends on the expected quality of schooling the home unit can produce relative to that available from alternatives. More specifically, our results indicate that women's educational attainment helps explain home school enrollment, that greater heterogeneity of income within a public school district increases home enrollment, and that stricter regulations decrease home school enrollment.     

Schools without a law: Primary education in France from the Revolution to the Guizot Law

The French Revolution substantially impacted primary schools as it suppressed one of their major funding sources, taxes collected by the clergy. Nonetheless, the geographical distribution of schools and enrollment rates remained relatively stable until late into the nineteenth century. In this article, I show that understanding the reorganization of primary schooling after the Revolution is essential in accounting for these long-lasting variations. By using data at the level of schools and an IV strategy relying on the trade cost shock caused by the Napoleonic blockade, I first show that municipalities took over the control of instruction in richer and growing areas. Secondly, I demonstrate that, by subsidizing schools, municipal authorities contributed to lower schooling fees and to increase enrollment. Finally, I show that human capital accumulation was higher in the schools provided with public grants, which influenced positively the subsequent development of municipalities. Public investment in education is therefore a key determinant of knowledge accumulation in nineteenth-century France.     

Good schools make good neighbors: Human capital spillovers in early 20th century agriculture

Formal schooling has a significant impact on modern agricultural productivity but there is little evidence quantifying the historical importance of schools in the early development of the American agricultural sector. I present new data from the Midwest at the start of the twentieth century showing that the emerging public schools were helping farmers successfully adapt to a variety of agricultural innovations. I use a unique dataset of farmers containing detailed geographical information to estimate both the private returns to schooling and human capital spillovers across neighboring farms. The results indicate that public schools contributed substantially to agricultural productivity at the turn of the century and that a large portion of this contribution came through human capital spillovers. These findings offer new insights into why the Midwest was a leader in the expansion of secondary education.     

Does public expenditure management matter for education outcomes?

This paper examines the significance of public expenditure management for primary education outcomes in public schools in two South African provinces (Gauteng and North West). Using cross-sectional data from 175 public primary schools and 13 local education offices, the analysis finds that while misappropriation of education funds (leakages) is not strongly associated with poor education outcomes, delays on the part of the government in disbursing funds to schools are correlated with Grade 5 dropout rates. The paper finds no evidence that public expenditure and total resource wealth (including public and private contributions) are significantly associated with education outcomes. Increased spending on learning and teaching support materials is associated strongly with lower Grade 1 and Grade 7 repetition rates. The paper also finds that repetition rates are driven strongly by poverty indicators at the district level, while dropout rates are driven strongly by district and school inefficiency.     

Gender gap in school enrolment among youth in Lesotho

This article uses data from the 1996 population census of Lesotho and the Ministry of Education's annual reports compiled during the period 1990–9 to investigate the trend of the gap between male and female enrolment in schools and higher learning institutions. The study examines various education indicators, school enrolment and dropout rates. There is no doubt that the gender gap still exists in Lesotho in favour of females. Both the cohort analysis and the analysis of dropout rates have shown that there is gender imbalance in schooling. In addition, the analysis has shown that the gender gap has recently started to narrow in primary, secondary and high schools but is widening at tertiary level. The article recommends that the government of Lesotho should look closely at the issue of the disadvantaged ‘boy child’ if it intends to eliminate gender disparities in schools.     

The Impact of Increased School Enrollment on Economic Growth in Tanzania

Abstract: Two different positions prevail in the recent discussion on the impact of education on economic growth: those who support a positive correlation between schooling and economic growth rates and those who claim that the impact of schooling on growth has been overstated. What is intriguing about this discussion is that both positions are based on theory and the results from empirical studies. We examine the long‐term effects of increased school enrollment (and effective attendance) on economic growth in Tanzania using a dynamic computable general equilibrium (DCGE) model. We find that an increase in human capital formation in the long run leads only to a moderate increase of economic growth rates but to a substantial improvement of factor incomes to low‐education households, while overall income effects are Pareto efficient.     

Economic returns to schooling in urban China: OLS and the instrumental variables approach

This paper examines economic returns to schooling in urban China using ordinary least square (OLS) and instrumental variable (IV) methodologies. First, we find that OLS estimates of the returns to education are lower in China than in other transition economies, whereas IV estimates are higher in China. Second, we find that OLS, a method for estimating the returns to education without control for endogeneity bias, may underestimate the true rates of return for men. In addition, if we do not control for endogeneity bias and the sample selection bias, we may further underestimate the true rates of return for women. Finally, we find that OLS estimates of the returns to education for men are slightly higher than for women. The IV estimates for women are higher than those for men, and this difference increases after correcting for selectivity biases.     

THE ROLE OF HUMAN CAPITAL IN CHINA'S TOTAL FACTOR PRODUCTIVITY GROWTH: A CROSS‐PROVINCE ANALYSIS

This paper studies the role of human capital in China's provincial total factor productivity (TFP) growth over 1985–2004. The stochastic frontier approach is employed to measure the productivity growth of Chinese provinces. Human capital is measured both qualitatively and quantitatively. In particular, enrolment rates at various levels of schooling are used to represent human capital composition. After controlling for endogeneity, we find that human capital has significant and positive effects on the TFP growth of Chinese provinces. However, when education quality is incorporated, productivity growth appears to be significantly enhanced by quality improvements in primary education only. Regional impacts of human capital are found to differ at various levels of schooling. In the eastern region of China, productivity growth is significantly associated with secondary education. TFP growth in the central region is mainly promoted by primary and university education. Yet in the western region, primary education plays the most prominent role.     

Accounting for Gender Equality in Secondary School Enrollment in Africa

In addition to analyzing the characteristics of gender equality in secondary education enrollment in Africa, this paper empirically studies the key drivers of gender equality in secondary education enrollment, using cross‐sectional time series data from 1970 to 2010. Our results show that the coefficient associated with the level of real GDP per capita is positive and statistically significant in both the overall Africa sample and in the sub‐Saharan and North African samples. But the quadratic term of real GDP per capita is negative in sign and significant in the overall Africa and sub‐Saharan African estimates. These provide evidence of a hump‐shaped relationship between real GDP per capita and gender equality in secondary education enrollment in Africa. Our results also suggest that higher share of female teachers in secondary schools, increased democracy (at a decreasing rate), higher female share of the labor force, Christian dominance in a country, higher domestic investment rate, and being an oil‐exporting country increase gender equality in secondary education enrollment in the continent. However, higher population growth tends to lower it. The policy implications and lessons of these results are discussed.     

Years of schooling: the Australian experience in comparative perspective

This paper examines why secondary school participation rates have been persistently lower in Australia than in Canada or the United States. The contributions of immigration and apprenticeship have not raised the stock of skills in the adult population to North American levels. Until recently Australians believed, for a variety of reasons, that secondary schooling was needed by only a minority of students. Supply constraints have also been important, as Australians experienced lower growth rates of income, and larger and more sustained increases in the school–age population.