Education, Employment and Earnings of Secondary School-Leavers ...

that a greater number of educated groups became self-employed during this period.The data from the survey used in this paper are consistent with this interpretation ofthe trends. A comparison of the 1990 and 1995 cohorts of secondary schoolcompleters reveals, after the same number of months in the labour force, a greaterproportion of the earlier cohort in wage employment (see Al-Samarrai and Bennell(2003)).The changes in the demand for educated individuals and the numbers entering thelabour force after completing their education clearly impacts on the private rate ofreturn to education secured in the labour market. Table 2 summarises the findings ofstudies that have estimated private rates of return to educational qualifications in theTanzanian formal sector over the last 30 years. The returns to secondary exceed thoseto primary in Tanzania and this possibly reflects the high proportion of the labourforce with primary education and the very limited numbers with secondary education.In addition, university rates of return are significantly higher than those accruing tosecondary education. Therefore, the education system, given its selective nature,appears to give rise to high premia for individuals who gained access to secondaryand university education.[Table 2]This pattern of returns to education differs from those observed elsewhere in sub-Saharan Africa and other developing countries. Private rates of return to primary,secondary and university education in the region tend to be much higher than thosereported in table 2. Moreover, a recent review revealed higher returns to primary thanto secondary education in sub-Saharan Africa (see Psacharopoulos and Patrinos(2002)). 6 Table 2 also shows that rates of return to university qualifications are muchhigher than those obtained in the primary or secondary sectors. While the most recentreview suggests that primary returns are higher than university returns, five out of the6 In periodic reviews of rates of return studies across the world Psacharopoulos has provided regionallyaggregated rates of return to different levels of education. These have consistently shown that primaryeducation has the highest private returns followed by university and then secondary education.However, there has been substantial debate around the quality of data used in these regional aggregatesas well as the time period covered. Bennell (1996) shows that the aggregated rates of return tosecondary exceed primary for sub-Saharan Africa if poor quality studies are excluded.5