An Update of the Returns to Education in Kenya: Accounting both endogeneity and sample selection biases

Kentaro Shimada, Zeba Khan, Suguru Mizunoya and Ayako Wakano
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Kentaro Shimada: Graduate School of International Cooperation Studies, Kobe University
Zeba Khan: Faculty of Social Science, Chinese University of Hong Kong
Suguru Mizunoya: Faculty of Social Science (Global Studies), Chinese University of Hong Kong
Ayako Wakano: Graduate School of Economics, Osaka University

No 16-18, Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics

Abstract: The study is latest to estimate returns to education after the introduction of free primary education in 2003 in Kenya, simultaneously addressing two sources of biases due to endogeneity of schooling and earnings, and sample selection. Using the 2005-2006 Kenya Integrated Household and Budget Survey, the paper finds that (a) returns to additional year of schooling are 14.9% for males and 13.5% for females with a continuous education variable, but the returns to females are consistently higher than males when returns are estimated by level of education, (b) returns to education increases for higher levels of education i.e., the classical pattern of diminishing return to schooling does not hold true for both males and females in Kenya, and (c) the use of joint IV-Heckman method adjust the endogeneity and sample selection biases introduced by OLS and IV.

Keywords: Returns to Education; Education Policy; Human Capital; Gender; Kenya (search for similar items in EconPapers)
JEL-codes: I25 I26 O55 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2016-05
New Economics Papers: this item is included in nep-dev and nep-edu
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