Returns to Education in South Africa: Evidence from the Machibisa Township

Working Paper

2003-05

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University of Cape Town


Development Policy Research Unit


University of Cape Town

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Development and Poverty Research Unit Working Paper Development Policy Research Unit Working Paper 03/076

Abstract
We develop a model where blacks in the private sector earn no returns to education if there are relatively too few educated blacks. Using a sample of black females in the late apartheid Kwa Zulu to control for labour market specific effects, we find that more than a fifth of labour market participants are self-employed. There are no returns to primary education and positive returns for the first two years of secondary education.
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