Estimating the rate of return to education in Sudan
Samia S. O. M. Nour
#2011-033
This paper examines the rate of return to education in Sudan. One
advantage and interesting element in our analysis in this paper is that
we explain three stylised facts on the rate of return to education using
new primary data in Sudan: first, positive but low rate of return to
education and correlations between education, experience, its square and
wages for men and women defined by gender, second, positive and
significant rate of return to education and correlations between
education, experience, its square and wages defined by firm size and
industry at the micro level across industrial firms and third, an
increase in skill levels and firm size leads to improved relationship
between actual education, required education, experience, its square and
wages at the micro level across industrial firms. Our paper is relevant
and consistent with the recent growing interest in the literature that
confirms the importance of investment in education and rate of return to
education. Different from the Sudanese literature that estimates the
return to human capital at the macro level, we investigate the rate of
return to education using new primary data at the micro level. A novel
element of our analysis is that we use new primary survey data at the
micro level obtained from the university survey (2009) and the firm
survey (2010), we present a new contribution and fill the gap in the
Sudanese literature by estimating first the rate of return to education
for men and women and explaining differences defined by gender and
second for industrial firms and explaining differences defined by firm
size and industry, since these issues are not adequately discussed in
the Sudanese literature. Our findings indicate the importance of
investment in education to facilitate enhancing educational attainment
and improvement of the rate of return to education in Sudan.
Keywords: Education, returns to education, gender, industry, Sudan.
JEL classification: J01, J16, J21, J24, J31, I21