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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:Is the Rate of Return of Primary Schooling Really 26 Per Cent?
Authors:Knight, John B.
Sabot, R.H.
Hovey, D.C.
Periodical:Journal of African Economies
Geographic terms:developing countries
Subjects:educational financing
primary education
Education and Oral Traditions
Economics and Trade
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. While the average rate of return on primary schooling may be as high as 26 percent, the marginal return is likely to be considerably lower. An illustration for Kenya shows that the average rate of return to primary schooling is 17 percent, whereas the marginal rate of return to primary schooling is 12 percent. The return to secondary education, by contrast, is not affected by the equivalent adjustment: the average and marginal rates of return are both 13 percent. The hierarchy of returns is thus reversed. The authors use a data set of nearly 2,000 Kenyan urban wage employees, derived from a survey administered in Nairobi in 1980. Bibliogr., notes, ref., sum.