Why Does the Productivity of Education Vary across Individuals in Egypt? Firm Size, Gender, and Access to Technology as Sources of Heterogeneity in Returns to Education
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The paper estimates the rates of return
to investment in education in Egypt, allowing for multiple
sources of heterogeneity across individuals. The paper finds
that, in the period 1998-2006, returns to education
increased for workers with higher education, but fell for
workers with intermediate education levels; the relative
wage of illiterate workers also fell in the period. This
change can be explained by supply and demand factors. On the
supply side, the number workers with intermediate education,
as well as illiterate ones, outpaced the growth of other
categories joining the labor force during the decade. From
the labor demand side, the Egyptian economy experienced a
structural transformation by which sectors demanding
higher-skilled labor, such as financial intermediation and
communications, gained importance to the detriment of
agriculture and construction, which demand lower-skilled
workers. In Egypt, individuals are sorted into different
educational tracks, creating the first source of
heterogeneity: those that are sorted into the general
secondary-university track have higher returns than those
sorted into vocational training. Second, the paper finds
that large-firm workers earn higher returns than small-firm
workers. Third, females have larger returns to education.
Female government workers earn similar wages as private
sector female workers, while male workers in the private
sector earn a premium of about 20 percent on average. This
could lead to higher female reservation wages, which could
explain why female unemployment rates are significantly
higher than male unemployment rates. Formal workers earn
higher rates of return to education than those in the
informal sector, which did not happen a decade earlier. And
finally, those individuals with access to technology (as
proxied by personal computer ownership) have higher returns.
Palabras clave
ACCESS TO COMPUTERS, BASIC EDUCATION, CHILDREN, CLASSROOM, COMMUNICATION, COMPLETION, COMPULSORY EDUCATION, COMPUTER SKILLS, COMPUTERS IN EDUCATION, CURRICULA, CURRICULUM, DEMAND FOR EDUCATION, DISTANCE LEARNING, EARLY EDUCATION, EDUCATION, EDUCATION ECONOMICS, EDUCATION LEVEL, EDUCATION SYSTEM, EDUCATIONAL ATTAINMENT, EDUCATIONAL LEVEL, EDUCATIONAL PATHS, EMPLOYEES, FEMALE EDUCATION, FEMALE EMPLOYMENT, FEMALE GRADUATES, FEMALE LABOR, FEMALE LABOR FORCE, FIRM SIZE, GENDER DIFFERENCES, GENERAL EDUCATION, GENERAL SECONDARY EDUCATION, GRADUATES, GROUPS, HIGHER EDUCATION, HIGHER LEVELS OF EDUCATION, HOUSEHOLD CONSUMPTION, HUMAN CAPITAL, ILLITERATE POPULATION, ILLITERATES, INFORMAL SECTOR, INTERNATIONAL MIGRATION, INVESTMENT, INVESTMENT IN EDUCATION, ITS, JOB, JOB TRAINING, KNOWLEDGE, LABOR, LABOR CONTRACT, LABOR DEMAND, LABOR FORCE, LABOR FORCE PARTICIPATION, LABOR MARKET, LABOR MARKETS, LABOR PRODUCTIVITY, LEARNING, LEARNING PROCESS, LEARNING PROGRAMS, LEVEL OF EDUCATION, LEVELS OF EDUCATION, LOWER LEVELS OF EDUCATION, MALE WORKERS, MANAGEMENT, MATHEMATICS, ON-THE-JOB TRAINING, PAPERS, PARTICIPATION, PARTICIPATION RATES, PREVIOUS DRAFT, PREVIOUS STUDIES, PRIMARY EDUCATION, PRIMARY LEVEL, PRIVATE SECTOR, PRIVATE SECTOR WORKERS, QUALITY OF EDUCATION, RATES OF RETURN, RATES OF RETURN TO EDUCATION, RETAIL TRADE, RETURNS TO EDUCATION, SCHOOL, SCHOOL DROP, SCHOOL DROP-OUT RATES, SCHOOLING, SCHOOLS, SECONDARY CERTIFICATE, SECONDARY EDUCATION, SECONDARY STUDENTS, SKILLED LABOR, SKILLED WORKERS, SKILLS, SOCIAL WORK, STATE-OWNED ENTERPRISES, STATISTICS, STUDENTS, STUDIES, STUDY, SUBSTITUTION EFFECT, TEACHERS, TECHNOLOGY, TRAINING, UNEMPLOYED, UNEMPLOYMENT, UNEMPLOYMENT RATE, UNEMPLOYMENT RATES, UNIVERSITY EDUCATION, UNSKILLED LABOR, VOCATIONAL EDUCATION, VOCATIONAL TRAINING, WAGE DISPERSION, WAGE INEQUALITY, WAGE LEVELS, WAGE PREMIUM, WAGE PREMIUMS, WOMEN