Estimating the returns to education in Cameroon informal sector

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Nguetse Tegoum, Pierre
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This paper discusses the returns to schooling in Cameroon within the informal sector. This is to evaluate to what extent having followed the basic education successfully influence the hourly earnings of workers in the informal sector. Then it analyzes the benefits of the first cycle of secondary education. The methodology used is based on the matching methods and the selection on unobservable models. The data used are those of the survey on employment and the informal sector conducted in 2005 by Cameroon National Institute of Statistics. The results confirm the positive impact of schooling on the income of informal sector workers. The benefits brought by the completion of basic education are estimated at 20% in the non-agricultural sector and at 28% within the agricultural sector. In addition, if unskilled workers now return to school and obtain the FSLC (or an equivalent certificate) this will increase their income by 22% to 25%. The effects of the possession of the GCEOL on the income of the workers of the non-agricultural informal sector are estimated to 33%. But in the agricultural sector this certificate may have no effect on earnings. Education also plays a fundamental role in the occupation status of individuals. The probability of entering into the formal sector increases with the level of education. The study recommends the implementation of measures aiming to increase education supply, especially in rural areas, improving the quality of education. There government should implement a national social education policy in favor of the poor; take measures for the follow up of the informal sector and facilitate the entry of young graduates into the labour market.
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