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Education and Labour Earnings Inequality in Tanzania: Evidence from Quantile Regression Analysis

Mlacha, Cornel J. and Ndanshau, Michael O.A (2018): Education and Labour Earnings Inequality in Tanzania: Evidence from Quantile Regression Analysis.

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Abstract

This paper aims to investigate the relationship between education and labour earning inequalities by using 2014 Integrated Labour Force Survey data for Tanzania. The quantile regression method is applied to compute returns to education at different points of earnings distribution. The estimation result reveals that there is significant variation in the coefficients of marginal returns to education across earning distributions; and, the estimated coefficients are higher at the top of earning distribution. This finding suggests education could contribute to widening of earnings dispersion in Tanzania. Accordingly, it is important to have policy in Tanzania to reduce disparities in the levels of education attained between the least and the most educated individuals.

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