The Causal Effect оf Education оn Earnings іn Urban аnd Rural South Africa: а Further Update

Abstract

T. ZWANE is used to address possible endogeneity bias due to reverse causation between earnings and education. Aft er controlling for endogeneity, we found that an additional year of education increased an individual's earnings by 37.8 % in the full sample. Interestingly, the coeffi cient of education was found to be positive and statistically signifi cant in both samples (urban and rural), reinforcing the results of the full sample. However, despite the coeffi cient of years of education being similar in direction (positively associated to earnings) across all samples, our results show that the education impact on individual earnings was higher in absolute values in urban areas. Th us, the 44.4 % increase of returns to education in the urban subsample was signifi cantly higher than the increase of 33 % observed for the rural subsample. Th ese results were to be expected, given the fact that South Africa is still battling the impact of the institutionalised policies of apartheid. In addition, we found that household size, head of household's age and whether the head of household was married were important factors positively infl uencing earnings in both territorial subsamples. Th e policy implications derived from our empirical results suggest that the government should invest more heavily in academic infrastructure, particularly in rural areas where the poor live, so as to improve the educational attainment in those areas.

The effects of work resources and career adaptability on employee health: A case of sample of teachers in South Africa

“…Growth, employment and redistribution advocated for a decrease in public expenditure, which resulted in the government failing to address the education imbalances, including that of teacher compensation. Zwane (2020) compared earnings between South Africa's urban and rural teachers relying on the National Income Dynamics data for the years 2008-2017. The study by Zwane (2020) revealed that an increase in a person's education qualification levels resulted in a corresponding increase in earnings equal to 37.8%.…”

“…Zwane (2020) compared earnings between South Africa's urban and rural teachers relying on the National Income Dynamics data for the years 2008-2017. The study by Zwane (2020) revealed that an increase in a person's education qualification levels resulted in a corresponding increase in earnings equal to 37.8%. Sadly, the study further reveals that the education impact on teachers' earnings is higher in absolute values for teachers in urban areas as they bagged 44.4% in total returns to education, compared to 33% for teachers in rural areas.…”

The Effect of Education on Earnings in a Post-Conflict Economy: Evidence from Bosnia and Herzegovina

“…As a rule, economic theory also recognises that investments in education and the development of competences contribute to better income in the lives of people (Becker, 1962). A significant number of empirical studies confirm that the level of education has an impact on the level of earnings of individuals (for example : Card, 1999;Efendic & Pugh, 2018;Harmon, Oosterbeek & Walker, 2003 Pereira & Martins, 2014;Psacharopoulos, 1994;Psacharopoulos & Patrinos, 2004;Risal & Gupta, 2017;Yakum & Kifem, 2018;Zwane, 2020). There is also compelling evidence that the better-educated individuals have higher earnings and less probability of being unemployed (for example Mulligan, 1997;Patel, 2019).…”

Determinants of Savings in Urban and Rural Households: Case of South Africa

“…Determinants of savings in urban and rural households: case of South Africa pulated, and had limited economic opportunities (May & Norton, 1997;De Vos et al, 2020). In a recent study, Zwane (2020) claims that the apartheid system forced the black population into homelands or rural areas where they were not permitted to obtain quality education which might lead them to aspire to positions in society that they would not be allowed to hold. Th e colonial and legislated oppressive regime of apartheid precluded opportunities and development in formerly black African areas (Von Fintel & Fourie, 2019).…”

“…In their work, Ashley and Maxwell (2001) argued that South Africa is one of the countries where poverty, unemployment, and inequality are prominent and seem to be worsening for the black African sections of society, particularly those living in rural areas. In their landmark statement, Ashley and Maxwell (2001: 395), cited in Zwane (2020), argued that: "[p]overty is not only widespread in rural areas [where Africans live], but most poverty is rural, at least for now".…”