Determinants of schooling returns; a case study of employees of Atutur Hospital in Kumi district:
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Date
2019-04
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Kampala International University, College of Economics and Management.
Abstract
This study mainly focused on investigating the relationship between schooling and the
earnings (wages) of the health workers. A case study was carried on employees of Atutur
referral hospital in Kumi district in Eastern Uganda. The study specific objectives were to
find out the level of earnings of health workers, determine the relationship between years
of schooling, age, and experience and education level on employee earnings. And finally
to investigate the effect of years of schooling, age, experience and education level on
earnings of employees. The researcher investigated the relationship between years of
schooling, age and experience by carrying out correlations on earnings and testing
hypothesis using the t sampling statistics. However since education was a categorical
variable the researcher used the one way ANOVA and test hypothesis for statistical
difference in means earnings of each education level. To investigate the effect of years of
schooling, age, and experience and education level on earnings, the researcher used the
Mincerian OLS regression model that regresses the natural logarithm of earnings of
employees and this effect tested using the F statistic. The Pearson correlation coefficients
sig. (2tailed) yielded correlation coefficients of 0.54 for years of schooling, -0.208 for age
and -0.267. One way ANOVAF ((2, 79) =54.664, p=O.003) showed at least there was
significant differences in mean earnings of each education levels, at 0.05 level and a
Tukey post hoc test for multiple comparison of mean earnings of each education level
showed that this mean differences were statistically significantly higher on tertiary levels
(13.19±0.713, pO.000) compared to primary level (11.12±0.522, p=O.5O8) and secondary
(11.47±0.818, p0.SOS). This showed a no statistical significant difference in mean
earnings of primary and secondary education level. The results also showed earnings rise
with education level. A secondary education added a 0.35 mean earnings on primary
level and a tertiary level added a 1.72 mean earnings to secondary schooling. Regression
at 95% confidence level yielded regression coefficients of 0.0 19 for years of schooling,
0.028 for age, -0.015 for experience and -1.6348 for primary education and -0.9432 on
secondary education (regression coefficients for education taken for dummies of ‘0’ and
‘1’ tertiary education was used as a reference group. The researcher observed that
earnings were significantly dependent on years of schooling, age and experience and
education level. It was also observed that earnings were significantly lower for primaryand secondary education in comparison to the other group (tertiary education) and the
wage gap was statistically significant. Experience had nonlinear relationships on
earnings. The researcher attributes the experience effect on ability and specialization
effect. Specialization causes mismatch in job requirements. Some employees can be too
specialized which cuts them from some job requirements due to over experience. When
the effects were tested the researcher noticed that variation in earnings was explained by
the independent variables used. The researcher recommends further research on
experience and earnings effect for future academicians they can as well investigate
returns to schooling and poverty. Government needs to adopt policies that maintain
children at school, and as well adopt proper subsidization policy for higher levels of
education to enable scholars enrich their schooling potentials. On wage issue, the
research advises government to adopt a salary review team to review salaries and create
equal opportunities of wages for employees of similar qualifications. Government should
too adopt cost sharing with investors in aspects likes employee training. By reducing
labour training costs, employees have a chance of being selected and enjoy balanced
earnings.
Description
dissertation summited to the college of economics and management department of economics and applied statistics in partial fulfillment for the award of the degree of bachelor of economics v and applied statistics of Kampala international university.
Keywords
schooling returns, Atutur Hospital, Kumi district