The Use of the Double-Hurdle Model in Estimating the Rate of Return to Education in South Africa

P Serumaga-Zake and D Kotze

Studies in Economics and Econometrics, 2003, vol. 27, issue 3, 103-119

Abstract: In this study, the Double-Hurdle Model (DHM) is compared to the more traditional technique, the Heckman's (1976) two-stage selection model in estimating the private rate of return to education in South Africa. The Heckman's model compares well with the DHM with correlated errors between the participation and employment functions. According to the DHM, the private rates of return to education of males and females are found to be respectively, 11,5 and 13 per cent for Blacks; 17 and 18 for Coloureds, 7,5 and 11 for Asians and 0,7 and 9,5 for Whites. It has also been indicated that in general, tertiary education is the most profitable private educational investment in South Africa.

Date: 2003
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DOI: 10.1080/10800379.2003.12106355

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