| dc.description.abstract | Investment in education is one of the most important factors of the social and economic development of modem countries. In Africa much emphasis is placed on the need to increase the level of human capital, through improved education access, to sustain high economic growth. This emphasis has given rise to renewed interest in obtaining estimates of private rates of returns to education (RORE) so as to understand the motivations which individuals have for their education and thus be in a position to inform policy makers. Education is known to be an important determinant of earnings in market economies.
The primary objective of this research was to investigate the variation in the return to different levels of education and to estimate the rate of returns to education in the Kenya. The study endeavored to determine the relationship between years of schooling and earnings (rate of return) in Kenya using KIBHS data. The effect of the amount of time in the labour force on earnings is also examined and an attempt made to highlight and calculate the private rates of return to graduates of different educational levels according to sectors of the economy and sex of the graduate.
The descriptive statistics and ordinary least squares (OLS) estimation results reveal that the mean monthly earnings of workers increase with more years of schooling. The private rate of returns is low for graduates of primary education. It is higher for secondary education graduates and highest for university graduates. It has also come out clear that the mean earnings increase with higher years of labour market experience.
Male and female benefit from increased education level but males' rate of return surpasses that of females in both secondary and university education levels. Increasing the years of schooling, training, and experience of workers has a significant effect on the earnings of the individuals. Thus, efforts should be made to improve the quality and investment in this level of education by encouraging private individuals to invest in and pay for higher education | en_US |
