First, we see from table 5.2 that in both the years the returns to primary education is not significant. This is an important part of the educated labor market scene which will be commented on further below.

Secondly, the incremental coefficients (showing the percentage increase in earnings relative to the previous stage for middle, secondary and higher are .09, .19, and .60 for 1987 respectively and .40, .35 and .41 for 1991. We see that in 1987 the returns to post-primary stages show increasing returns to schooling, with large percentage gains only occurring at the level higher than secondary. By 1991 the labor market had changed to a condition in which all the stages of education beyond the primary offered equal percentage increase in earnings. An important element in this change was no doubt the squeezing of wage differentials particularly in the public sector. Although the data in this survey of 1991-2 do not reflect the effect of the across-the-board increase of civil service wages by 80 per cent, this type of salary hike would not change the picture, because its impact would be to maintain existing wage differentials in percentage terms.

Thirdly, the schooling coefficients of Table 5.1 show that there was a marked increase in the rate of return to education between 1987 and 1991. This is a reflection of the point already noted that at the latter date education at all levels above the primary were being rewarded equally, not just the highest level. This result might be an indication that the labor market was by 1991 recovering to the point of being sensitive to the acquisition of human capital. It is consistent with the result referred to in the last section that education was in 1991 accounting for a greater share of inequality in earnings than a few years earlier (see Table 3.4 above).

# **5.1 Public and Private Sectors**

The results discussed so far do not treat the public and the private sectors separately. We need to turn our attention to this distinction since, within the class of wage earners, principles of wage determination could be expected to be quite different in these two sectors. Glewwe (1996) used the 1988-89 GLSS survey to study earnings functions separately for the two sectors. The standard OLS estimates yielded the result that the coefficient of 'years of schooling' were practically identical -- 0.0751 for the public employees and 0.0738 for private wage earners. But when selectivity of workers entering the two sectors were allowed for through two selection equations determining the choice between wage work and other work, and also between government wage and private wage employment, there were dramatic changes in the return to education. Two alternative methods of estimation yielded the identical result-that "in the government sector the returns to education drop to about 4-6 per cent, and in the private sector they appear to be zero" (p.274). Commenting on this result Glewwe wrote that it is difficult to believe that education had no impact on earnings unless one got a government jobthat there were no return to education in private wage employment. Rather, Glewwe suggests one got this result because the quality of schooling had dropped so much in Ghana at this date, that 'years by education' by themselves did not produce significant earnings increment. The variation in the quality of schooling were probably more 31