Educational expansion,government policy and wage compression |
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| Institution: | 1. Chemical Engineering Department, Faculty of Engineering, Ferdowsi University of Mashhad, Mashhad, Iran;2. Research Center of Membrane Processes and Membrane, Faculty of Engineering, Ferdowsi University of Mashhad, Mashhad, Iran;1. Grantham Research Institute on Climate Change and the Environment, London School of Economics, Houghton Street, London WC2A 2AE, UK;2. Department of Economics and Finance, University of Wyoming, 1000 E. University Ave, Laramie, WY 82071, USA |
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| Abstract: | The main objective is to measure the elasticity in the response of relative wages by education to relative supplies of educated labour. Using rigorously comparable urban wage-labour market surveys, an econometric comparison is made of Kenya and Tanzania — countries which constitute a natural experiment, having different secondary education policies but being similar in other relevant respects. Post-primary educational expansion, as Kenya, is an effective means of compressing wages. However, the Tanzanian scarcity premium on post-primary education is held down by the alternative means of public sector pay policy. The analysis suggests an important role for occupation in the wage adjustment process. |
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