Working Paper 110 - Education and Employment in Malawi

Publishing Date 02/06/2010 16:03

Categories: Malawi, Education, Human Capital Development, Employment

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Working Paper 110 - Education and Employment in Malawi (2.22 MB)

Description Malawi’s educational system fairs poorly on a sub-regional scale. The gross enrolment rate is the lowest in the South African region. At the primary school level, pupil to teacher ratio stood at 80:1, repetition rates at 20 percent and the internal efficiency coefficient at 35 percent - all worse than the Sub-Saharan averages. Malawi ranked at the bottom of SACMEQ countries in English reading and math scores (SACMEQII, 2005). At 9 percent, the percentage of children reaching a minimum level of mastery in reading in English has halved over the 1998-2004 period. In Mathematics, 98 percent of the students do not possess skills beyond basic numeracy and none of them has skills beyond competent numeracy. Recent studies analyzing linkages between education, employment and earnings in Malawi employers find that graduates are more likely than others to find a job and that there is excess demand for skilled labour by the private sector [Jimat consultant (2008), Kadzamira (2003) and Pfeifer and Chiunda (2008)]. These studies find unemployment among secondary school graduates are low (8 percent in 2001 for graduates in 1990 and 1995), and close to zero among university graduates. Secondary school graduates are typically located in urban areas and are engaged in skilled wage employment. Of these, 70 percent are involved in wage employment, and 58 percent hold a professional and skilled non-manual job. The private sector is the main employer (69 percent), followed by the education system (mostly primary school teachers) This paper focuses on the relationship between education, employment and earnings in Malawi, with the aim to identify potential shortages in human capital and the incentives to be put in place for the country to satisfy its labour needs. It analyzes the relationship between education and employment in Malawi using data from the Integrated Household Survey (IHS-2) 2004-05. The study finds that education is critical to formal employment for both men and women, and leads to higher hourly earnings. Within regular wage employment, secondary education is associated with a 123 percent wage premium, and university education with a 234 percent wage premium (relative to illiteracy). In both rural and urban areas, income is positively correlated with specialization in regular wage employment. For example, in urban areas 60 percent of the households who derive at least 75 percent of their income from regular wage employment belong to the highest quartile of the income distribution. This reflects the relative scarcity of human capital. The study shows that among prime age males (25 to 39 years old), only 10 percent have completed secondary education. For women in the same age group, the situation is even worse, with the rate of completion of secondary schooling as low as 3 percent. Analysis of school enrolment highlights that teenage women experience high dropout rates, which prevent greater female enrolment in higher education, and therefore constrain future participation in the best forms of employment. The study stresses the need to address problems that cause high failure, repetition and drop-out rates for school children from poor households. Cash transfers programs that condition payments to regular school attendance may help sustain demand for education, reducing the opportunity cost of schooling. For such programs to be effective, however, supply side constraints should also be addressed. For example, the provision of monetary incentives aimed at increasing the number of qualified teachers in rural areas, where the majority of the poor live, may help reduce the ratio of students to qualified primary teachers, and may lead to improved quality of learning and pass rates.

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Working Paper 110 - Education and Employment in Malawi (2.22 MB)

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