Does Education Play a Role in Explaining the Rural‒Urban Wealth Gap? Evidence from Tanzania

Gabriel K. Mafie, Youjin Hahn and Hee-Seung Yang ()

Hitotsubashi Journal of Economics, 2021, vol. 62, issue 2, 162-177

Abstract: This paper examines factors that determine differences in living standards as measured by a wealth index between rural and urban areas in Tanzania, by applying theBlinde r‒Oaxaca decomposition method. The rural‒urban wealth gap has remained largely unchanged over time while rural‒urban differences in educational attainment play a significant role in explaining this gap. Further evidence shows that the wealth gap caused by a differential return to education is also significant. Our results stress theimportanceof improving thequality and quantity of education in rural Tanzania in attempting to decrease the rural‒urban wealth gap.

Keywords: Education; Oaxaca decomposition; rural‒urban difference; Tanzania; wealth gap (search for similar items in EconPapers)
JEL-codes: D3 I2 O1 O5 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:hit:hitjec:v:62:y:2021:i:2:p:162-177

DOI: 10.15057/hje.2021008

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