Theme 2

Economic and labour market outcomes

• Theme 2 qual work in India/ Ghana/ Pakistan

• Theme 2 quant work has utilised Ghana/ Pakistan RECOUP data and other data

• Work on Indian RECOUP data likely to begin shortly

International: pattern of economic returns to education

Chris Colclough, Geeta Kingdon and Harry Patrinos. “The Pattern of Returns to Education and its Implications” Draft Policy briefing, Sept. 2008.

• The pattern of economic RORE can help us to understand the poverty-reducing potential of different levels of education.

• Commonly believed that labour market returns to education are highest for the primary level of education and lower for subsequent levels.

• Paper presents evidence suggesting the pattern is changing. It explores implications for both education policy and labour market policy

Kingdon, G., H. Patrinos, C. Sakellariou and M. Soderbom. “International Pattern of Returns to Education”, mimeo, 2008.

• Using a common specification of the wage equation, this work examines the shape of edu-Y relation in 11 countries (4 African, 2 South Asian and 5 S.E. Asian)

• Finds pronounced convexity: return to education is greater at higher levels of educ

Table 3 Estimates of Mincerian returns to different levels of education, using recent data

Primary Middle or Lower

secondary

Secondary or Higher

secondary

Higher

Ghana (1998) 8.9 8.5 8.8** 16.9**

Kenya (2000) 11.6* --- 16.4** 25.5**

Tanzania (2001) 10.2** --- 12.0** 27.3**

South Africa (2003) 12.0** 21.6** 24.4** 34.1**

India (2004) 0.0 7.2** 12.6** 15.6**

Pakistan (2001) 6.0** 6.1** 13.2** 15.3**

Indonesia (2000) 5.0** 8.4** 13.7** 17.2**

China (2004) 0.0 7.8** 7.5** 10.1**

Philippines (1999) 8.4** 7.8** 8.4** 21.6**

Thailand (2002) 13.5** 13.4** 10.6** 23.1**

Cambodia (2004) 5.3** 5.6** 7.7** 11.1*

Average 7.4 9.6 12.3 19.8

Source: Kingdon, Patrinos, Sakellariou and Soderbom (2008).Note: * and ** represent statistical significance at the 10% and 5% levels respectively. Returns estimates reported for male waged workers (of all working ages, not just 25-34 year olds, as in Table 2 above).

Ghana – examining the return to apprenticeship

• Key output : ‘Does Doing an Apprenticeship Pay Off? Evidence from Ghana’ Revised version under review at EDCC. Monk, Sandefur, Teal

• RECOUP Ghana Household Survey (2006) used.

• Apprenticeship is by far the most important institution providing training and is undertaken primarily by those with JHS or lower levels of education.

• Summary statistics indicate that those who have done an apprenticeship earn much less than those who have not. This suggests that endogenous selection into the apprenticeship system is quite important.

• For currently employed people who did apprenticeships but have no formal education, training increases earnings by 50%.

• Returns to apprenticeship decline with education. Further analysis shows that the investment in apprenticeship yields a ROR in line with other educational investments

• Significance of the paper: to show that apprenticeship training benefits mainly those with no formal education

Ghana – do economic outcomes of health differ by education level?

• Monk, C. and F. Teal. “Health and Labour Market outcomes in urban Ghana”. Mimeo, Aug. 2008.

• Examines relation between health and labour market outcomes

• Uses short-term measure (days of illness) and long-term measure (height)

• Health and labour market outcomes strongly related

• Illness affects labour supply decision, also earnings; height affects earnings

• Impact on of illness on earnings is larger for the more educated

• Significance: to measure the extent to which education influences the impact of health on labour market outcomes

China – role of education in persistence of and in escape from poverty

• Output: ‘Education and the Poverty Trap in Rural China’ forthcoming in Oxford Development Studies, John Knight

• Addresses the central question of the RPC

• Views the relationships between education and income as forming a system that can generate a poverty trap

• Using data from rural China, examines:– the determinants of enrolment (whether poverty has an adverse effect

on both qual/ quan of education) - so contributing to a poverty trap. – whether the returns to education vary according to household and

community income – thereby also contributing to a poverty trap.

• The paper asks whether, and how, education can break this vicious circle of poverty, with implications for policy.

India – qualitative study on skills training and livelihood outcomes

Output: Education, skills training and livelihood outcomes for poor communities (mimeo, 2008)

• The labour market outcomes of skills training were explored through interviews with drivers, tailors and electricians

• Also interviewed those with govt technical training in the it is

• Access to training is difficult, even to training of the kind that does not on its own result in release from poverty

• Even those with govt ITI training, now affected by casualisation of labour and do not find permanent employment

• This study helps elucidate how skill-development occurs amongst the poor, and will be of value for strategies to enhance its benefits

Pakistan – Returns to schooling, ability and skills

• Aslam, Bari and Kingdon: “Returns to Schooling, Ability and Skills in Pakistan”.

• RECOUP-PAKISTAN 2007 data; investigates outcomes of education for wage earners.

• Analyses relationship between schooling, cognitive skills and ability on the one hand, and economic activity, occupation, sectoral choice and earnings, on the other.

• Imp question : what does the coefficient on ‘schooling’ in wage functions measure? – HCT holds the coefficient measures a return to higher productivity, – credentialist view -it represents a return to acquired qualifications and credentials – signalling hypothesis suggests it captures a return to native ability. – This paper seeks to adjudicate between these theories – has the right data

• There is no evidence of signalling. There is profound convexity in the edu-Y relation

• Much of the direct effect of cognitive skills disappears after conditioning on schooling, hinting at credentialism.

• However, much of the effect of schooling operates through positive behavioural traits possessed by individuals when aged 15. Thus, instead of credentialism it could be reflecting a return to non-cognitive traits valued (and remunerated) in labour market

Pakistan – Is education a path to gender equality in the labour market?

• Aslam, Kingdon, Soderbom – forthcoming in World Bank volume.

• Asks: whether/ to what extent education is a path to gender equality in labour market

• Labour market benefits of education accrue both – from education/skills promoting a person’s entry into the more lucrative occupations, and – by raising earnings within any given occupation.

• Find that women’s propensity to participate in paid employment does not rise with education upto about 10 years of education. Beyond 10 years of education, women’s chances of entry into wage employment improve strongly with each extra year of S.

• However, only 10% of women have completed 10 years of education or more. Thus, education is a means of gender equality in occupational attainment only for a very restricted number of women

• More positively, within all occupations, RORE is much higher for women than men. So the gender gap in earnings falls dramatically with education.

• Thus, while education is a path to gender equality in that it strongly reduces the earnings gap between employed men and women, this positive assessment has to be moderated by the fact that up to 10 years of education, education is not a sufficient counter to culture, attitudes and division-of-labour norms to encourage female LFP.

Looking ahead

• hh datasets are unique

• appear under-utilised

• Quantitative agenda using existing data:– return to schooling, skills, ability– return to quality of schooling– return to knowing English

• India work shortly starting on these

• Panel data need to be generated

Papers on economic outcomes of education

• Monk, Courtney, Justin Sandefur and Francis Teal. “Does Doing an Apprenticeship Pay Off? Evidence from Ghana.”, mimeo, CSAE, Nov. 2007 (revised, review EDCC)

• Francis Teal. “Education, Incomes and Job opportunities in Africa: From investment to jobs”, mimeo, Sept. 2008. (a version of this is forthcoming in a SA policy journal)

• Knight, J. 'Education and the poverty trap in rural: Setting the trap' forthcoming in Oxford Development Studies. [effect of income/poverty on education].

• Knight, J. 'Education and the poverty trap in rural: Closing the trap', forthcoming in Oxford Development Studies. [effect of education on income/poverty].

• Aslam, M., Bari, F. and G. Kingdon. “Returns to Schooling, Ability and Skills”, mimeo, CSAE, January 2008. (under review for RECOUP working paper)

• Aslam, M., G. Kingdon, M. Söderbom (2008) “Is Education a Path to Gender Equality in the Labour Market? Evidence from Pakistan”, forthcoming in World Bank volume: Education: A Critical Path to Gender Equality and Empowerment.

• Kingdon, G. and N. Theopold “Do Returns to Education Matter to Schooling Participation?: Evidence from India”, Forthcoming in Education Economics.

Other papers

On health and related outcomes• Aslam, M., Kingdon, G. and S. Malik, ‘Maternal Education and Child Health –

Understanding the Pathways in Pakistan’, mimeo, CSAE, May 2008.

• Irving, M. and G. Kingdon. “Gender patterns in household health expenditure allocation: A study of South Africa”, mimeo, Institute of Education, University of London, Mar. 2008.

• Monk, C. and F. Teal. “Health and job quality in Ghana: Is self-employment bad for your health?” mimeo, Jan. 2008.

• Monk, C. and F. Teal. “Health and Labour Market outcomes in urban Ghana”.

On PPPs in education• Kingdon. G. “Private and Public Schooling: The Indian Experience”,

Forthcoming Chakrabarti, R. and P. Peterson (eds) School Choice International, MIT Press

On political economy of education• Kingdon, G. & M. Muzammil. “Teacher politics, teacher unions and the school

governance environment in India: A study of Uttar Pradesh”. Mimeo, June, 2008

On student learning outcomes

• Aslam, M. and G. Kingdon. ‘What can Teachers do to Raise Pupil Achievement?’, RECOUP Working Paper #19, University of Cambridge, 2008.

• Altinok, N. and G. Kingdon. “New Evidence on Class Size Effects: A Pupil Fixed

Effects Approach”, mimeo, Institute of Education, May 2008.

• Kingdon, G. and F. Teal. “Teacher unions, teacher pay and student achievement in India”, mimeo, Institute of Education, September 2008. Under review at JHR

• Kingdon, G. and F. Teal. “Does Performance Related Pay for Teachers Improve Student Achievement? Some Evidence from India”, Economics of Education Review. 26, No. 4: 473-86. August 2007.

Gender and education papers

• Aslam, M. and G. Kingdon. “Gender and Household Education Expenditure in Pakistan: Engel Curve Evidence”, Forthcoming in Applied Economics, 2008.

• Aslam, M. “Education Gender Gaps in Pakistan: Is the Labour Market to Blame?”, Forthcoming in Economic Development and Cultural Change.

Miscellaneous education papers

• Kingdon, G. “The Progress of School Education in India”, Oxford Review of Economic Policy, 23, No. 2: 168-195, Summer 2007.

• Kingdon, G. “Economics of Education”, in G. McCulloch and D. Crook (eds.) International Encyclopaedia of Education, Routledge, London, 2008.

• Kingdon, G. and R. Cassen. “Race and Low Achievement in English Schools at Key Stage 4”, mimeo, Institute of Education, April 2008. Under review, BERJ.

• Kingdon, G. and R. Cassen. “School Quality and the Incidence of Low Achievement at Key Stage 4”, mimeo, Institute of Education, Nov. 2007.