Real Wages and Returns to Human Capital in Kenya Manufacturing firms

Anthony Wambugu
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Anthony Wambugu: Department of Economics, School of Economics and Commercial Law, Göteborg University, Postal: Box 640, SE 40530 GÖTEBORG

No 75, Working Papers in Economics from University of Gothenburg, Department of Economics

Abstract: This paper studies how real wages and wage returns to human capital in Kenya manufacturing firms changed, using cross-section data sets from a survey conducted in 1993, 1994, 1995, and 2000. A quantile regression technique is used to examine how the impact of human capital varies across the conditional wage distribution. The study found that between 1993 and 2000, the real wage, standardized for observable human capital characteristics increased, while returns to education appear to have been stable. Returns to education are highest for workers educated to advanced levels of education at all quartiles. Moreover, workers at the extreme top of the wage distribution have the highest returns to education while workers at the extreme bottom of the wage distribution have the lowest returns to education. This suggests that at each level of education, unmeasured factors compliment schooling in wage determination. Other dimensions of human capital such as tenure in current firm and worker’s age are also significantly correlated with wages.

Keywords: Quantile regression; returns to schooling; Kenya (search for similar items in EconPapers)
JEL-codes: J30 O10 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2002-06-20
New Economics Papers: this item is included in nep-afr, nep-dev and nep-lab
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Citations: View citations in EconPapers (2)

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