Rates of return on physical and human capital in Africa's manufacturing sector

Economic Development and Cultural Change

Volumn 48, Issue 4, 2000, Pages 800-827

  Bigsten, Arne ^a   Isaksson, Anders ^a   Söderbom, Måns ^a   Collier, Paul ^b   Zeufack, Albert ^b   Dercon, Stefan ^c,d   Fafchamps, Marcel ^c   Gunning, Jan Willem ^c   Teal, Francis ^c   Appleton, Simon ^c   Gauthier, Bernard ^e   Oduro, Abena ^f   Oostendorp, Remco ^g   Pattillo, Cathy ^h  

^a UNIVERSITY OF GOTHENBURG   (Sweden)

^b WORLD BANK   (United States)

^c UNIVERSITY OF OXFORD   (United Kingdom)

^d UNIVERSITY OF LEUVEN   (Belgium)

^e HEC MONTRÉAL   (Canada)

^f UNIVERSITY OF GHANA   (Ghana)

^g VU UNIVERSITY AMSTERDAM   (Netherlands)

^h INTERNATIONAL MONETARY FUND   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

HUMAN CAPITAL; INCOME; LABOR PRODUCTIVITY; MANUFACTURING;

AFRICA;

EID: 0033816355     PISSN: 00130079     EISSN: None     Source Type: Journal    
DOI: 10.1086/452478     Document Type: Article

References (28)

1. A recent survey is described in S. Appleton, J. Hoddinott, and J. Mackinnon, "Education and Health in Sub-Saharan Africa," Journal of International Development 8, no. 3 (May-June 1996): 307-39.
2. R. E. Lucas, "On the Mechanics of Economic Development," Journal of Monetary Economics 22 (July 1988): 3-42, and "Why Doesn't Capital How from Rich to Poor Countries?"American Economic Review 80 (May 1990): 92-96; and D. Romer, Advanced Macroeconomics (New York: McGraw-Hill, 1996) .
3. R. E. Lucas, "On the Mechanics of Economic Development," Journal of Monetary Economics 22 (July 1988): 3-42, and "Why Doesn't Capital How from Rich to Poor Countries?"American Economic Review 80 (May 1990): 92-96; and D. Romer, Advanced Macroeconomics (New York: McGraw-Hill, 1996) .
4. R. E. Lucas, "On the Mechanics of Economic Development," Journal of Monetary Economics 22 (July 1988): 3-42, and "Why Doesn't Capital How from Rich to Poor Countries?"American Economic Review 80 (May 1990): 92-96; and D. Romer, Advanced Macroeconomics (New York: McGraw-Hill, 1996) .
5. A. Krueger, "Factor Endowments and Per Capita Income Differences among Countries," Economic Journal 78 (September 1968): 641-59; and P. R. Fallon and P. R. G. Layard, "Capital-Skill Complementarity, Income Distribution, and Output Accounting," Journal of Political Economy 83, no. 2 (1975): 279-96.
6. A. Krueger, "Factor Endowments and Per Capita Income Differences among Countries," Economic Journal 78 (September 1968): 641-59; and P. R. Fallon and P. R. G. Layard, "Capital-Skill Complementarity, Income Distribution, and Output Accounting," Journal of Political Economy 83, no. 2 (1975): 279-96.
7. A. Wood, North-South Trade, Employment, and Inequality: Changing Fortunes in a Skill-Driven World (Oxford: Clarendon, 1994). Also see A. Wood and K. Berge, "Exporting Manufactures: Human Resources, Natural Resources, and Trade Policy," Journal of Development Studies 34, no. 1 (1997): 35-59.
8. A. Wood, North-South Trade, Employment, and Inequality: Changing Fortunes in a Skill-Driven World (Oxford: Clarendon, 1994). Also see A. Wood and K. Berge, "Exporting Manufactures: Human Resources, Natural Resources, and Trade Policy," Journal of Development Studies 34, no. 1 (1997): 35-59.
9. T. Owens and A. Wood, "Export Oriented Industrialisation through Primary Processing?" World Development 25, no. 9 (September 1997): 1453-70.
10. P. Bennell, "Rates of Return to Education: Does the Conventional Pattern Prevail in Sub-Saharan Africa?" World Development 24, no. 1 (1996): 183-99.
11. G. Psacharopoulos, "Returns to Education: A Global Update," World Development 22, no. 9 (1994): 1325-43.
12. Bennell, p. 195.
13. The data for Ghana do not allow us to identify those who started but failed to complete primary schooling.
14. The value added per employee figure for Zambia is also low. This may be due to problems in the use of purchasing power parity (PPP) exchange rates to convert the domestic Zambian currency to U.S. dollars. Zambia experienced a period of very high rates of inflation in the early 1990s, and it is possible that the PPP exchange rate is misleading over the period. The data appendix gives the PPPs used in the calculations.
15. The changes in real earnings are obtained from the dummy variables as exp(coefficient) -1, as suggested by R. Halvorsen and R. Palmquist, "The Interpretation of Dummy Variables in Semilogarithmic Equations," American Economic Review 70, no. 3 (1980): 474-75.
16. J. Mincer, Schooling, Experience, and Earnings (New York: National Bureau of Economic Research, 1974).
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20. J. Behrman and B. Wolfe, "The Socio-Economie Impact of Schooling in a Developing Country," Review of Economics and Statistics 66, no. 2 (1983): 296-303; P. Krishnan, "Family Background, Education, and Employment in Urban Ethiopia," Oxford Bulletin of Economics and Statistics 58, no. 1 (1983): 167-83; D. Lam and R. F. Schoeni, "Effects of Family Background on Earnings and Returns to Schooling: Evidence from Brazil," Journal of Political Economy 101, no. 4 (1993): 710-40; J. J. Heckman and V. J. Hotz, "An Investigation of the Labor Market Earnings of Panamanian Males: Evaluating the Sources of Inequality," Journal of Human Resources 21 (1986): 507-42; G. Kingdon, "Does the Labour Market Explain Lower Female Schooling in India?" Discussion Paper no. 1 (London School of Economics and Political Science, Development Economics Research Programme, London, January 1997).
21. J. Behrman and B. Wolfe, "The Socio-Economie Impact of Schooling in a Developing Country," Review of Economics and Statistics 66, no. 2 (1983): 296-303; P. Krishnan, "Family Background, Education, and Employment in Urban Ethiopia," Oxford Bulletin of Economics and Statistics 58, no. 1 (1983): 167-83; D. Lam and R. F. Schoeni, "Effects of Family Background on Earnings and Returns to Schooling: Evidence from Brazil," Journal of Political Economy 101, no. 4 (1993): 710-40; J. J. Heckman and V. J. Hotz, "An Investigation of the Labor Market Earnings of Panamanian Males: Evaluating the Sources of Inequality," Journal of Human Resources 21 (1986): 507-42; G. Kingdon, "Does the Labour Market Explain Lower Female Schooling in India?" Discussion Paper no. 1 (London School of Economics and Political Science, Development Economics Research Programme, London, January 1997).
22. J. Behrman and B. Wolfe, "The Socio-Economie Impact of Schooling in a Developing Country," Review of Economics and Statistics 66, no. 2 (1983): 296-303; P. Krishnan, "Family Background, Education, and Employment in Urban Ethiopia," Oxford Bulletin of Economics and Statistics 58, no. 1 (1983): 167-83; D. Lam and R. F. Schoeni, "Effects of Family Background on Earnings and Returns to Schooling: Evidence from Brazil," Journal of Political Economy 101, no. 4 (1993): 710-40; J. J. Heckman and V. J. Hotz, "An Investigation of the Labor Market Earnings of Panamanian Males: Evaluating the Sources of Inequality," Journal of Human Resources 21 (1986): 507-42; G. Kingdon, "Does the Labour Market Explain Lower Female Schooling in India?" Discussion Paper no. 1 (London School of Economics and Political Science, Development Economics Research Programme, London, January 1997).
23. J. B. Knight and R. H. Sabot, Education, Productivity, and Inequality: The East African Natural Experiment (Oxford: Oxford University Press, 1990).
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25. O. Ashenfelter and A. Krueger, "Estimates of the Economic Return to Schooling from a New Sample of Twins," American Economic Review 84, no. 5 (December 1994): 1157-73; O. Ashenfelter and C. Rouse, "Income, Schooling, and Ability: Evidence from a New Sample of Identical Twins," Quarterly Journal of Economics 113, no. 1 (February 1998): 253-84; J. Behrman, M. R. Rosenzweig, and P. Taubman, "College Choice and Wages: Estimates Using Data on Female Twins," Review of Economics and Statistics 78, no. 4 (November 1996): 67-85.
26. O. Ashenfelter and A. Krueger, "Estimates of the Economic Return to Schooling from a New Sample of Twins," American Economic Review 84, no. 5 (December 1994): 1157-73; O. Ashenfelter and C. Rouse, "Income, Schooling, and Ability: Evidence from a New Sample of Identical Twins," Quarterly Journal of Economics 113, no. 1 (February 1998): 253-84; J. Behrman, M. R. Rosenzweig, and P. Taubman, "College Choice and Wages: Estimates Using Data on Female Twins," Review of Economics and Statistics 78, no. 4 (November 1996): 67-85.
27. J. Behrman, M. R. Rosenzweig, and P. Taubman, "Endowments and the Allocation of Schooling in the Family and in the Marriage Market: The Twins Experiment," Journal of Political Economy 102, no. 6 (1994): 1131-74.
28. A. Bigsten, P. Collier, S. Dercon, B. Gauthier, J. W. Gunning, A. Isaksson, A. Oduro, R. Oostendorp, C. Pattillo, M. Söderbom, M. Sylvain, F. Teal, and A. Zeufack, "Investment in Africa's Manufacturing Sector: A Four Country Panel Data Analysis," Oxford Bulletin of Economics and Statistics 61, no. 4 (1999): 489-512.