CREDIT 21/04: Youth education and household welfare in Tanzania

Abstract

This paper examines whether the welfare difference between youth (aged 15-35) and adult (aged over 35) headed households between 2001 and 2018 is attributable to differences in educational attainment following Universal Primary Education (UPE) in Tanzania. The recentered influence function (RIF) decomposition method applied to household budget survey (HBS) data for 2001 and 2018 reveals that the increase in youth educational attainment between 2001 and 2018 is significant in explaining the difference in welfare (measured as per adult equivalent household consumption relative to the national poverty line) between the 2001 and 2018 youth cohorts. The findings suggest that if the youth in 2001 had the same education endowment as their 2018 counterparts, their welfare would have been about 20% higher. The findings also show that differences in educational attainment are significant factors explaining differences in welfare between youth and adult headed households in each year. If adults had the same level of educational attainment as the youth, their welfare would have been about 40% and 32% higher in 2001 and 2018 respectively. Although there is evidence that returns to education declined for the youth (consistent with more educated youth entering the labour market), this does not appear to have had a significant effect on household welfare.

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Authors

Livini Donath, Oliver Morrissey and Trudy Owens

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