Abstract:
This thesis estimates the economic returns to an additional year of schooling in
Ghana using data from a twins’ survey. Consequently, the relative importance of the roles
of genetics and family background in determining earnings and returns to schooling in
Ghana is examined. A number of models and estimation methods were utilized to
illustrate the sensitivity of different estimators to model specification.
The results indicate that the economic return to schooling in Ghana using
Mincer’s Human Capital model is about 10%. Estimates of the economic returns to
schooling using fixed effects and selection effects regression models and incorporating an
instrumental variables approach to correct for measurement error in self-reported
schooling levels was also assessed. The measurement error corrected return to schooling
for monozygotic twins was larger than the standard ordinary least squares return to
schooling estimate indicating a downward bias in the ordinary least squares return to
schooling.
Finally, the Restricted Maximum Likelihood approach was adopted to identify
unobservable differences in the returns to schooling for twins’. The analysis revealed
significant unobservable differences (p<0.05) in the REML returns to schooling for
dizygotic twins’ whiles, unobservable differences in the REML returns to schooling for
monozygotic twins was not significantly different from zero. The estimated “pure” rate of
indicator for considering
policies related to education.
