RATES OF RETURN TO EDUCATION IN BOTSWANA: RESULTS FROM THE 2002/2003 HOUSEHOLD INCOME AND EXPENDITURE SURVEY DATA SET

Hk Siphambe

South African Journal of Economics, 2008, vol. 76, issue 4, 641-651

Abstract: Using the most recent Household Income and Expenditure Survey data (2002/2003), this paper presents current rates of return to education for Botswana. The results show that the rates of return have in general declined by one percentage point on average between the periods as shown in Table 2. If we, however, look at the averages for the different school cycles, the fall in the average rates is quite significant at about six percentage points between the periods. The biggest fall is for secondary education, especially upper secondary education, which fell by 28 percentage points between the periods. The rates of return to tertiary education, however, rose by more than 50 percentage points. Ignoring upper secondary, the pattern of rates of return has remained similar to the results of the study based on the 1993/1994 data. Rates are higher for tertiary education and lower for secondary than for primary education. This results are still consistent with rates of return generally rising with level of education. At policy level, the results continue to support sharing of costs between Government and beneficiaries or their parents especially at tertiary education level. Second, the results indicate the need for the country to continue to vigorously pursue job creation and reorient the education system from emphasis on white collar jobs. 2 Mincerian earnings function: overall Ψ Dependent variable (ln monthly earnings) Variable Coefficient Constant 4.08 (321.6) Education 0.15 (378)** Experience 0.085 (171.2)** Experience Squared −0.001 (−142)** IM Ratio −2.12 (3.68)** R2 (Adjusted) 0.29 Sample Size (n) 5,328 Ψ Note: t‐statistics in parenthesis. ** Significant at 1% level of significance.

Date: 2008
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