While educators in Africa have focused on supplying vocational education, this has long conflicted with students’ preference for an academic education. How do the returns from academic education, in terms of a higher income, compare with those of vocational training?

Tanzania introduced new education policies in the 1960s in an attempt to shift its focus from academic to vocational education and limit the supply of secondary education. However, in the 1990s, it reversed this policy. This policy shift was justified by the view that the rate of return to investing in general secondary education is far higher, in terms of increased income.

However, research into this issue has, to date, produced conflicting results, with strong disagreements about the relative merits of academic versus vocational education. A study by the Centre for the Study of African Economics, in the UK, examines the returns to vocational education compared with that of academic education.

Data was analysed from surveys of Tanzania’s manufacturing sector conducted from November 1999 to January 2000, and January 2002 to February 2002. The main findings are:

• For both vocational training and academic education, the amount by which earnings increase with education depends on the type of firm in which the worker is employed and the level of education.
• There is a general pattern by which the return to academic education rises with the level of education. For vocational education, the highest returns are at the lower levels.
• Firms with more vocationally-trained workers tend to pay less. This may reflect the quality of the firm or its type of activity, but it means that earnings can be lower for a vocationally-trained student than for one with less education.
• The annual increase in earnings to vocational school (usually lasting two years) after primary level is 7.6 percent for those in a small firm of 10 employees, and 11.7 percent for those in a large firm of 100 employees or more. These increments are higher than for primary school.
• Students who attend technical college (usually for three years) after O-level receive an annual increase in earnings of 8.3 per cent if they work in a large firm, but less than 5 percent if working in a small firm.

There is no simple answer to the question of how the returns to vocational education compare with that of academic education. The answer will depend on when the student enters vocational education and the type of firm in which the student is eventually employed. However, the study shows why, at present, vocational school is so unpopular with both students and their parents. The returns for students who are successful in the academic educational stream, especially those who reach A-levels and higher, are far greater than the returns to any form of vocational or technical training.

One possible reason for higher returns to higher levels of secondary education in larger firms is that teaching narrowly defined skills and the ability to solve problems does not help to develop the kind of general skills that the more technically-advanced firms in Tanzania need.

Source(s):
‘The Returns to Vocational Training and Academic Education: Evidence from Tanzania,’ CSAE Working Paper Series 2008-07, by Godius Kahyarara and Francis Teal, 2008 (PDF) Full document.
Further details about this research project ‘Paths out of Poverty’ Full document.

Funded by: Global Poverty Research Group of the Economic and Social Research Foundation and the UK’s Department for International Development (DfID) - ESCOR Project R 7909

id21 Research Highlight: 27 April 2008

Further Information:
Francis Teal
Centre for the Study of African Economies
Department of Economics
University of Oxford
Manor Road
Oxford OX1 3UQ
UK

Tel: +44 1865 71077
Fax: +44 1865 281447
Contact the contributor: francis.teal@economics.ox.ac.uk

Centre for the Study of African Economies, University of Oxford

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'Linking school and work in Ghana and Tanzania'

'Is vocational education reaching all? - Israel's experience'