Is the Rate of Return on Primary Schooling Really 26 Per Cent?

John Knight, R H Sabot and D C Hovey

Journal of African Economies, 1992, vol. 1, issue 2, 192-205

Abstract: It is argued that the conventional wisdom which accords priority to investment at the primary level of education in developing countries may be based on methodologically flawed estimates. The problem arises on account of the "filtering down" of educated entrants to the labour market into lesser jobs as education is expanded. The (conventionally measured) average rate of return is compared with estimates of the marginal rate of return to the entering cohort. An illustration for Kenya shows that the rate of return on primary schooling is highly sensitive to this distinction, whereas that on secondary schooling is not: the hierarchy of returns is reversed. Contrary to the conventional wisdom, the jury is still out. Copyright 1992 by Oxford University Press.

Date: 1992
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