metadata: authors: 0: author: Grootaert,Christiaan N.
count: Cote d'Ivoire
docna: 0: docna: Cote d'Ivoire's vocational and
            technical education
docty: Policy Research Working Paper
subtopic: Labor Markets,Primary Education,Educational Sciences,Educational Institutions & Facilities,Employment and Unemployment,Effective Schools and Teachers
teratopic: Gender
abstracts: cdata!: Cote d'Ivoire spends more of its
            budget (42 percent) on education than any other country in
            the world. The purpose of this paper is to present an
            economic assessment of vocational and technical education
            (VTE) within the country. This assessment takes a
            three-pronged approach. First, it studies the impact of VTE
            on earnings, analyzes the role of VTE in gaining access to
            different types of jobs and third, examines the cost
            structures of both formal and informal VTE such as
            out-of-pocket costs, opportunity costs and institutional
            costs. As part of this presentation, the paper also
            discusses the household survey which is the main data source
            for the analysis. In addition, it describes the general
            education sector in Cote d'Ivoire, the formal system of
            vocational and technical education, the system of informal
            apprenticeships and the Bank's involvement in the
            education sector in the country.
geo_reg_key: 517191,1927320
repnme: repnme: Cote d'Ivoire's vocational and
            technical education
display_title: Cote d'Ivoire's vocational
            and technical education
listing_relative_url: /research/1988/06/437311/cote-divoires-vocational-technical-education
topicv3: Primary Education m1326139 480,Informal Sector m1326258 1168,Teacher Training m1326786 1532,Education m1327048 470,Apprenticeship m1327745 2132
publishtoextweb_dt: 2010-07-01T00:00:00Z
historic_topic: Gender
origu: Policy Plan & Prog Review Dept
no_of_pages: 152
author_keys: 0: author_key: 90761
model_extractions: <!-- Start of picture text --> Planning, and Rah |a<br>Educalon and Empbynrl |<br><!-- End of picture text -->

CO:e d'Ivoire spends more of its budget (42%) on education than any other country in the world. Part of its spending on formal vocational education and training should be redirected toward training in the informal sector.

The public costs of formal vocational and technical education (VTE) per student are four to seven times higher than the costs to individuals because of generous scholarship programs, the high cost of expatriate teaching staff, and the underuse of facilities during the current recession. Specific policy measures that would increase the social rates of returp on investments in vocational training and education include:

* Reducing scholarships to VTE students.

* Replacing expensive expatriate (mostly French) teachers with Ivorians.

* Building fewer new buildings and making better use of the old ones.

* Upgrading the apprenticeship system by setting up short-term vocational and technical (especially evening) courses that complement apprenticeshi. training. These would include courses for the self-employed on, say, credit and maireting to help them run their own businesses.

* Promoting the employment of formal VTE graduates outside Abidjan, the magnet for most rural migrants.

This paper is a product of the Education and Employment Division, Population and Human Resources Department. Copies are available free from the World Bank, 1818 H Street NW, Washington, DC 20433. Please contact Rita Vartanian, room J601 1, extension 34678.

The PPR Working Paper Series disseminates the findings of work under way in the Bankes Policy, Planning, and Research Complex. An objective of the series is to get these findings out quicldy, even if presentations are less than fully polished. The findings, interpretations, and conclusions in these papers do not necessarily represent official policy of the Bank.

Copyright e 1988 by the International Bank for Reconstruction and Dev,it.entilhe World Bank
|CONTENTS|Pge|
|---|---|
|**1***Introduction**.........**<br>**...................................**|1|
|2. Data Source**............................................**|4|
|3. Education in C8ted'Ivoire<br>**......................................**|8|
|4. Formal Vocational and Technical Education<br>**....................**|**....**<br>19|
|5. Informal VTE: Apprenticeships<br>**..................................**|**.**24|
|6. Bank Involvement in the Education Sector in C8te d'lvoire<br>**......**|**..**30|
|7. Economic Assessment of VTE at the National Level<br>**..............**|**...**<br>36|
|7?1Earnings Analysis<br>**........................................**|**...**<br>36|
|7.2Access to Wage Employment<br>**..............................**|**.....**<br>53|
|7.3 The Costs of VTE ...<br>**.......................................**|**..**60|
|7.4Internal Rate of Return<br>**................................**|**.....**<br>70|
|7.5Earnings Analysis for the Self-Employed<br>**..................**|**...**<br>77|
|7.6Summary of Main Findings<br>**...............................**|**.....**<br>80|
|8.The Regional Dimension<br>**.......**<br>**......**<br>**.........................**|**..**82|
|8.1Earnings Analysis**.....................* **<br>**...................**|**.**83|
|8.2 Access to Wage Employment**.......**<br>**.........................**|**.**87|
|8.3 Costs and Rates of Return**.......**<br>**..........................**|**..**90|
|8.4 Suimmary<br>of Main Findings .|96|
|9. The Sectoral Dimension**.......**|**9...**<br>98|
|10. Interaction Among Human Capital Variables<br>**.....................**|**...**<br>109|
|11. Suumary of Main Findings and Policy Issues**.....**<br>**................**|**.**114|
|References .|120|
|Appendix 1: Some Specification<br>Issues Regarding the Earnings<br>Function<br>**.....**<br>**0**|122|
|Appendix 2: Comparison with Other Estimates<br>**..................**|**...**<br>126|
|Appendix 3: Institutional Costs: Detailed Tables**...............**|132|
|Appendix 4: Short-Term Training in C8te d'Ivoire<br>**.............**|**...**<br>139|
|Appendix 5: CILSS Education and Training Module<br>**..............**|**...**<br>142|
# List of Tables and Figures

|Table<br>|1:<br>|TheCILSS Questionnaire**...............................**<br> <br>|5|
|---|---|---|---|
|Table|2 :|Mscroeconomic<br>and Human Resourece<br>Indicators for||
|||C8ted'Ivoire, 1984*.--<br>**..-..--.....-.-**<br>**.-...--.-.**|9|
|Table|3 :|<br>Gross Enrollment Ratios|10|
|T&.-1|ie<br>4:|Literacy and Numeracy Rates|12|
|Table|5 :|Distribution<br>of People by Highest Diploma||
|||Obtained and Sex|13|
|Table|6 :|Incidence and Duration of V"E<br>**.**|20|
|Table|7 :|Highest Grade Completed by VTEGraduates|21|
|Table|8 :|Relation Between Work Status andVTE|23|
|Table|9 :|Incidence andDurationof Apprenticeships|25|
|Table|10:|Highest Grade Completed by People with||
|||Apprenticeship Training**.............................**|27|
|Table|11:|Relation Between Work Status and Apprenticeship||
|||Training|28|
|Table|12:|Bank Education Loans to C8te d'Ivoire**.....**<br>**e........**|31|
|Table|13:|IBRD/IDA Lending for Training in C8te d'Ivoire||
|||(1982 -<br>1986)**....................**|**33**|
|Table|14:|Monthly Earnings by Employment Status|38|
|Table|15:|Monthly Earnings (W2) of Workers, According to||
|||Educational<br>Background**...... ......... ...............**|40|
|Table|16:|Means and Standard Deviations of Earnings Function<br>||
|||Variables**........................................**|**.**43|
|Table|17:|Earnings Function (lnWI)- All Employees|46|
|Table|18:|Earnings Function (lnW2)-<br>All Employees|49|
|Table|19:|<br>Earnings Function (lnW2)- AllEmployees<br>-<br>||
|||Corrected for Selection Bias|51|
|Table|20:|<br>Choice of Employment Status-<br>Probit Results|58|
|Table|21:|Annual Private Costs of VTE (Per Student)**.............**|62|
|Table|22:|Annual Institutional Costs of VTE**.....................**|66|
|Table|23:|Composition of Teaching Staff in VTE Institutes**.......**|68|
|Table|24:|Benefit andCostStreams for VTE Graduates**............**|71|
|Table|25:|Internal Rates of Return for VTE**.o...................**|74|
|Table|26:|Earnings Function for the Self-Employed|78|
|Table|27:|Means and Standard Deviations of Regional Earnings||
|||Function Variables**................ ***<br>**.**<br>**.**|84|
|Table|28:|Earnings Functions, by Location|85|
|Table|29:|Choice of Employment Status- Probit Results,||
|||by Location|88|
|Table|30:|Annual Private Costs of VTE (per Student),||
|||by Location**c...........**<br>**....**<br>**......**|91|
|Table|31:|Benefit and Cost Streams for VTE Graduates,||
|||by Location|92|
|Table|32:|<br>Internal Rates of Return for VTE, by Location|94|
|<br>Table|<br> Z3:|<br> Earnings Functions (lnW2) by Type of Employee|99|
|Table|34:|<br>Access Functions (Probit Results)**.e....,cc..c..cc,c100**||
|Table|<br>35:|<br>Earnings Functions (lnW2) for Government and||
|||<br>Private Sector Employees, by Location|105|
|Table|36:|<br>Earnings Functions (lnW2) for Private Formal||
|||Sector Employees, by Location**ccecececccececceeoccccc**|106|
|Table|37:|<br>Earnings Function by Years of General Education|111|
|Table Al.1:<br>TabJle<br>A2.1:<br>Table A2.2:|Earnings Function (1nW2) with Parental<br>Education Variables<br>**1...............**<br>23<br>Comparison Between VV Estlmates and This Paper......<br>127<br>All Employees Earnings Function with<br>Different Dependent Variable ..................<br>a.. 130|
|---|---|
|Table A3.1|: Institutional<br>Costs for Secondary Level VTE<br>Institutions**.........**<br>**.**<br>133|
|Table A3.2:<br>Table A3.3:|Institutional Costs: INSET<br>**.........................**<br>136<br>Institutional<br>Costs of Teacher Training Institutes**..**138|
|Figure 1:<br>Figure 2:<br>Figure 3:<br>Figure 4:|Structure of the Education System in C8te d'Ivoire .... 15<br>Earnings Profiles: Effect of Previous Job Experience .<br>54<br>Earnings Profiles: Effect of Apprenticeships**........**<br>55<br>Earnings Profiles: Effect of Secondary VTE**...........**<br>56|
|Figure 5:|Earnings Profiles: Effect of Post-Secondary<br>VTE<br>and Teacher Training<br>**................................**<br>57|

This paper was prepared by Christiaan Grootaert while he was an Economist working with the Policy Division in the Education and Training Department. Mr. Crootaert is currently Senior Economist in the Social Dimensions of Adjustment, Unit of the Central Africa Department at the World Bank.
# Acknowledgements

I am indebted to Nicholas Bennett, "Lark Blackden, Chris Dougherty, Wadi Haddad, Dean Jamison, Emmanuel Jimene;s, Andre Komenan, John Middleton, Peter Moock, Morton Stelcner and Manuel Zrmelman for many helpful comments on an earlier draft and discussions on the subject matter of the paper. Special ttanks are due to Roxana Carvalho who handled all data management and computing tasks in an outstanding way. I also wish to thank Setsuko Oiyama and Ruby Morgan whose text processing skills gave this document its existence.
# 1. Introduction

The purpose of this paper is to present an economic assessment of Vocational and Technical Education (VTE) in the Republic of C8te d'Ivoire. A study of the VTE sector in that country is of particular interest for two reasons. First, ever since independence, investment in education has been a top priority in M8te d'Ivoire's development strategy. The sector has received a rising share of the Government's recurrent budget, exceeding 40% over the last decade - which is a higher share than in any other country in the world. The scrutiny of these expenditures is thus important, especially in an era of economic recession and adjustment, which has imposed a climate of fiscal austerity on the country.

Second, the Vocational and Technical Education sub-sector is of particular interest because it juxtaposes a formal and informal system of providing VTE. Formal VTE is given in a series of instititions that are Integrated in the overall education structuree Parallel to that exists a system of individually arranged apprenticeships, mostly ln small urban enterprises, where VTE is acquired in an on-the-job setting. This duality raises a question about the relative effectiveness of both systems in teaching people skills that provide them access to gainful employment, and about their relative cost-effectiveness in doing so.

The economic assessment presented in this paper therefore takes a three-pronged approach. First, the impact of VTE on earnings is studied. This analysis relies mostly on expanded Mincer-type earnings functions to
-2-

reveal the contributions to earnings made by general education, formal VTE, and apprenticeships (informal VTE). The specification will bring out the role of diplomas and certificates obtained. Second, the role of VTE in gaining accezd to different types jobs is ana4yzed. This will be portrayed by binary choice models which, successively, will sz.0w the effects of VTE on the choice between self-employment and wage-employment, the choice between private and public sector employmenc, and on the choice between formal and informal sector wage employment. The explicit consideration of the employment selection process permits to test for and, if needed, to correct selection bias in the estimated earnings functions, at each stage of the analysis. Third, the cost structures of both formal and informal VTE are analyzed: out-of-pocket costs, opportunity costs, and institutional costs. In combination with the earnings analysis, this will permit to compute private and social rates of return to investment in diferent types of vocational and technical education.

The plan of the paper is as follow. In the next section, we discuss the household survey which is the main data source for the analysis. Sections 3 to 5 are devoted to a description of, respectively, the general education sector in C8te d'Ivoire, the formal system of vocational and technical education, and the system of informal apprenticeships. Section 6 outlines the Bank's involvement in the education sector in the country. The empirical analysis starts in section 7 with the presentation of results at the national level. The discussion covers the impact of VTE on earnings and on access to jobs, the private and
- 3 -

social costs of the VTE system, and the internal rate of return of investments in VTE. In sections 8 and 9, regional and sectoral dimensions are introduced into the analysis. Section 10 focuses on the interaction between general education and VTE. Lastly, section 11 summarizes the main findings and policy implicafions.
-4-

# 2. Data Source

The main data source for this study is the C8te d'Ivoire Living Standards Survey (CILSS), conducted between February 1985 and February 1986. The survey canvassed a nationally representative sample of 1,600 households. Information was collected on a wide array of subjects, including income, expenditures, assets, employment, and socio-economic characteristics of the household and its members. Table 1 liats the different sections of the CILSS questionnaire and their content.l/ The education module recorded self-reported literacy and numeracy, educational attainment of all household members aged five or above, educational expenses of household members enrolled in the last twelve months, and education of children who no longer live in the household. The education module is reproduced in Appendix 5.

CILSS interviews took place in two rounds, two weeks apart, which made possible the set-up of a system of in-field detection and correction of interviewer and measurement errors. To that effect, microprocessors were installed in Abidjan and in the regional statistical offices where the field teams were based. After the first round, the questionnaires were immediately delivered to the team's regional office. Since it was almost completely precoded, the information on the questionnaire could be entered directly on computer diskettes, thereby avoiding the conventional step of coding (which is often very slow and susceptible to error). Using a custom I/ A further description of this questionnaire can be found in Grootaert (1986).
# Table 1: THE CILSS QUESTIONNNAIRE

-FIRST ROUND-

|Qu|estionnaire<br>Section|Obtained Information|
|---|---|---|
|*|Composition<br>of the<br>Household|Identification<br>of the members of the<br>household. Demographic<br>information.<br>Information on the parents of the<br>household members.|
|*|Housing|Type of housing, tenancy status, housing<br>expenditures. Source of water and 1b<br>type of fuel used, other amenities.|
|*|Educstion|Literacy and educational attainment of<br>household members 5 years and older.<br>Schooling expenses in the last 12<br>months. Education of children who no<br>longer live in the household.|
|*|Health|Number of days of illness or injury, time<br>lost in regular activities. Health<br>expenditures. Utilization<br>of health<br>services in the last four weeks.<br>Preventive health care and associated<br>expenditures<br>in the last 12 months.|
|*|Activities|Main and secondary activities of<br>household members 7 years or older, in<br>the last 7 days and in the last 12<br>months. Type and sector of activities,<br>time devoted to activities, income and<br>social security benefits. Job search,<br>search for additiotal work, unemployment<br>spells. Work history. Domestic<br>activities.|
|*|Migration|Changes in residence of household members<br>age 15 or above. Reasons for the<br>migration.|
|*|Respondents for<br>the Second Round|Id& :ification<br>of the household members<br>that must be interviewed<br>during the<br>second round.|
|*|Housing Characteristics|Construction<br>materials and dimensions of<br>the living quarter.|

|-continued-|
|---|
- 6 -

# Table 1 (cont'd): THE CILSS QUESTIONNAIRE

-SECOND ROUND-

|Qu|estionnaire<br>Section|Obtained Information|
|---|---|---|
|*|Farm and Livestock<br>Activitien|Area of land utilized, purchases and<br>sales In the last 12 months. Harvest and<br>disposition of the crops. Age of<br>perennials. Farm inputs. Income and<br>expenditures<br>of farms and activities that<br>transform farm products. Inventory of<br>livestock, purchases and sales during the<br>last 12 months. Income from the sales of<br>animal products. Mutual aid. Farm<br>equipment and tools. Sharecropping.|
|*|Non-farm Self-Employment<br>Activities|Income, expenditures,<br>capital goods for<br>the three main non-farm enterprises of<br>the household.|
|*|Expenditures<br>and<br>Inventory<br>or Durable<br>Goods|Daily expenditures<br>in the last two<br>weeks. Non-food expenditures<br>in the last<br>two weeks and the last 12 months.<br>Inventory of durable goods. Expenditures<br>of family support.|
|*|Food Expenditures<br>and<br>Consumption<br>of Home<br>Produced Food|Food expenditures<br>in the last two weeks<br>and the last 12 months. Consumption<br>of<br>home produced food in the last 12<br>months.|
|*|Fertility|Pertains to a woman aged 15 or more,<br>randomly chosen during the first round.<br>Number of children, number of<br>pregnancies,<br>and utilization of maternity<br>services during the last pregnancy.|
|*|Other Incom,_|Income from family support, and other<br>income not yet accounted for in previous<br>sections.|
|*|Credit 'nd Savings|Loans and savings of the household.|
written program, data were then subjected to a series of range and consistency checks, and a list of all possible errors and inconsistencies das printed Cut. During the second round, the enumerators filled out the remainder of the questionnaire and verified the answers that had been marked as potentially in error on the print-out. The completed questionnaires were then returned to the regional offices for data entry of the second round and of the corrected information pertaining to the first round. In combination with other featurer, such as a high ratio of supervisors to enumeratorP d random re-interviews of households, this system permitted to maintain a high level of quality control on the field operations. The data derived from the CILSS are therefore generally of high quality.1/ 2/ More detail about the CILSS tield work and the data entry system can be found in Ainsworth & Munoz (1986).
-8-

# 3. Education in C8te d'Ivoire

The Republic of C8te d'Ivoire is a middle-income ecou.omy, which in the 1970s enjoyed a rapid economic growth, pushing GNP per capita to a record $1,200 in 1981. Since then, the country has been very hard hit by the worldwide recession, in particular by the drop in primary product prices. By 1984, the country's GNP per capita had fallen almost 50% to $610 (Table 2). Although the population of 10 million is still predominantly engaged in agriculture, the country has a high degree of urbanization. The urban population is concentrated in Abidjan, the economic capital, which has about 1.8 million residents. The C8te d'Ivoire's social and economic picture is therefore trichotomous: next to differences in living and working conditions between rural and urban areas, there is also a sharp difference between Abidjan and the other cities. Size alone reflects this: Bouake, the second largest city in the country, has less than 1/5 the population of Abidjan. Consequently, the analysis in this paper is not only done at the national level, but, to the extent that the number of observations permit it, the regional dimension is explicitly introduced.

Since independence in 1960, the government of C8te d'Ivoire has put a high priority on education, and the significant resources devoted to the sector have resulted in a rise of the primary enrollment rate from 332 to 84% in 1985 (Table 3). Between 1960 and 1973, the government's recurrent expenditures on education and training grew at an average annual
-9-

# Table 2: MACROECONOMIC AND HUMAN RESOURCE INDICATORS

# FOR COTE D'IVOIRE, 1984

|Population|9.9 million|
|---|---|
|Average Annual Growth, 1973-1984|4.5%|
|Average Annual Projected Growth, 1980-2000|3.7%|
|GNP Per Capita (1984 dollars)|$610|
|ktverage Annual Growth, 1965-1984|0.2%|
|Life Expectancy at Birth|52 years|
|Infant Mortality Rate (per thousand)|106|
|Percent of Labor Forcel/ in<br>-<br>Agriculture<br>-<br>Industry<br>-<br>Services|65%<br>8%<br>27%|
|Percent of Population in Urban Areas|46%|

I/ 1980 Source: World Bank (1986)
- 10 -

Table 3: GROSS ENROLLMENT RATIOSI/

||Abidjan|Other Cities|Rural|Total|
|---|---|---|---|---|
|Primary School<br>(Ages 7-12)|104.0|100.9|70.9|83.8|
|Secondary School<br>(Ages 13-18)|58.1|46.3|14.0|32.5|
|Secondary School<br>+"Terminal"<br>(Ages 13-19)|53.6|42.8|13.3|30.4|
|University (1-4 years)<br>(Ages 20-23)|<br>9.4|1.9|0.2|2.9|
|University (1-8 years)<br>(Ages 20-27)|<br>6.8|1.5|0.1|2.2|

, The number of enrolled people over the total population in a given age-group x 100.
- 11 -

rate of 17.52, which was faster than the growth of recurrent public revenues. As a result, the share of education in the government's

- recurrent budget rose from 22% to 33X which was a higher figure than in any other country in the world (den Tuinder, 1978). This share continued to rise to 45% in 1980, and has since decreased to 42% - but it is still the highest in the world.

In urban areas, universal primary schooling has been achieved, but rural areas are lagging. The education effort has benefited, of course, mostly the young generation, and overall literaLy and numeracy in the country is still quite low (Table 4). The differences between locations are notably sharp. For example, less than 1!5 of the rural population aged 5 and above knows how to write, but 61X of people in Abidjan and 442 of people in other cities do. Among other factors, the massive migration of the seventies into Abidjan has contributed to exacerbating the urban-rural gap.

C8te d'Ivoire's educational system was modelled after the French system and starts with a 6-year primary cycle. At the end, a Certificat d'Etudes Primaires Elementaires (CEPE) is obtained. Secondary studies are broken down in a 4-year cycle, recognized with a Brevet d'Etudes Premier Cycle (BEPC), and a 3-year cycle, after which one obtains the Baccalaureate. The latter is a requirement to enter the University of Abidjan, or any of the post-secondary institutes of tecainical education. Table 5 shows that only a small fraction of the Ivorian population has
- 12 -

Table 4: LITERACY AND NUMERACY RATES (X)

||Abidjan|Other Cities|Rural|Total|
|---|---|---|---|---|
|Reading|64.7|51.5|23.0|37.7|
|Writing|60.9|44.1|18.5|32.8|
|Arithmetic|66.8|59.0|31.0|44.4|
13 -

-

Table 5: DISTRIBUTION OF PEOPLE BY HIGHEST DIPLOMA OBTAINED AND SEX

||Abid|jan|Other|Cities|Rur|al|
|---|---|---|---|---|---|---|
||Female|Male|Female|Male|Female|Male|
||X|2|X|Z|%|2|
|None|71.2|52.9|80.0|62.4|96.1|87.9<br>|
|CEPE|17.1|25.1|15.1|23.7|3.8|9.7|
|BEPC|3.1|5.9|2.6|6.1|0.1|1.5<br>|
|Upper Secondary|1.3|2.9|0.4|1.5|0.0|0.3<br>|
|University Degree|1.1|2.2|0.1|0.5|0.0|0.0|
|Technical Vocational<br>Diploma.|..8|10.5|1.7|5.2|0.0|0.5|
|Other|0.4|0.5|0.0|0.4|0.0|0.0|
|Total|100.0|100.0|100.0|100.0|100.0|100.0|
|(Sample size)|(1,005)|(936)|(1,215)|(1,142)|(3,053)|(2,694)|
- 14 -

completed any educational cycle.<sup>3</sup> / In rural areas, 4% of women and 10% of men have completed primary education. Less than 2X of men have completed a higher cycle. In Abidjan, about 1/4 of men have a primary education degree, 3% have completed secondary education, and 2.2% have a university degree. Women hold fewer certificates and diplomas than men, and the relative gap is largest at the upper secondary level. However, since the gap is lower for university degrees, it suggests that relatively more women than men who obtain a baccalaureate are also successful at obtaining a university diploma.

Vocational and technical education (VTE) can be obtained in CMte d'Ivoire both through formal and informal channels. The formal VTE system is extremely complex, as it consists of many different types of public and private institutes. The public institutes depend administratively and budgetarily from no less than 18 different ministries.4/ Thev can be grouped as follows (for the meaning of abbreviations, see Figure 1):

- 3/ This table as well as all following tables pertain to the population aged 5 or above.

- 4/ Detailed descriptions of the VTE system can be found in Guirassi (1986) and ONFP (1986). Two general studies of the VTE sector in C8te d'Ivoire are Achio (1983) and ONFP (1984).
I~~~~~~~~~~~~~~~~~~~~~~~~~~~ <!-- Start of picture text --> ! -r -- ___<br>D~~~~~~~~~~~~~~~~~~~ - - -t - -f - ' ----- --- ------- L i<br><!-- End of picture text -->
- Institutes dependent from the Ministries of Education5/

- secondary level institutes:

- 2 technical high schools (Lyckes Techniquescapacity: 2,745 students - cu-riculua: 3 years)

- 7 vocational high schools (LycEes Professionmelscapacity: 3,538 students - curriculua 3 years)

- 8 technical colleges (CET/CET fdeminin - capacity: 2,331 students - curriculum: 2-3 years)

- 15 vocational training centers (CFP - capacity: 1,606 students - curriculu: 2 years)

- 7 miscellaneous training centers (capacity: 435 students - curriculum: 1-3 years)

- post-secondary level institutes

- National Institute for bigher Technical Education (INSET -2-5 years) capacity: 6 / 1,464 students - curriculu:

- teacher training institutes:

- 15 primary school teacher training centers (CAFOP/ENI - capacity: 3,405 students - curriculu: 2 years)

- Institute for Secondary School Teacher Training (ENS _-_ capacity: 2,500 students - curricula: 3-4 years)tJ

- National Institute for Vocational and Technical Teacher Training curriculum: (IFNETP -1-5 years)capacity: 6 ? 300 students -

- 5/ There are currently three Ministries of Education in COte d'Ivoire, responsible for primary education (Ministare de l'Eneeignement Pre-scolaire et Primaire), vocational and technical education (Ministare de i'Enseignesent Technique et de Ia Formation Professionnelle), and general secondary and higher education (Ministbre de l'Education Nationale).

- 6/ _INSET, ENS_ and IPNETP are administratively independent institutes, but they "depend" from the Ministries of Education by receiving most of their budget from them.
-17-

- institutes dependent from other ministries: there are 39 different institutes belonging to 14 "technical" ministries (such as Public Works, Agriculture, etc.), which provide technical and vocational education at both the secondary and post-secondary levels. (For a list of these institutes, see ONFP (1986).) The capacity of these institutes is 7,274 students.

All of the institutes in the above list provide "initial" VTE, i.e., students typically enter the institutes directly after completing the prerequisite general education curriculum, without work experience. There are also a number of institutes that are geared to people currently in the work force, to allow them to refresh or upgrade their skills. This is typically short-term training, and its management and finance (through a payroll tax) lies largely outside the system of initial VTE. A description of short-term training institutes and the payroll tax is in Appendix 4.

In addition to the public VTE institutes, there exist also privately operated institutes, the majority of which offer curricula in business and secretarial skills. There are currently about 40 such institutes with a theoretical capacity of over 15,000 students. In practice, these institutes enroll far fewer students and are characterised by the poor quality of their training and low success rates (Achio, 1983).

Figure 1 presents an overview of the public system of general, vocational and technical education in C8te d'Ivoire. The lower two
- 18 -

rectangles in the figure are not comprehensive and only Illustrate how some of the institutes dependent from technical ministries fit in with the rest of the system.

As an alternative to participating in the formal VTE system described above, an individual wishing to acquire vocational or technical skills can turn to the informal mechanism of apprenticeships. An apprenticeship arrangement can be started as early as primary school age and can last ten years or more. It typically consists of a young person working full time in a small enterprise at zero cash wage while learning a trade. Food and lodging are sometimes provided, but by no means always, and in some cases, a fee is even required from the apprentice. The exact nature of the arrangement is negotiated in each case between the owner oi the enterprise, the apprentice and his/her parents. There are no specific government regulations that pertain to the apprenticeship contract, nor are there public institutes that deal with it. The training received as an apprentice is very practically oriented but usually quite limited in scope. As a result, it is widely perceived as an inferior form of VTE, relative to that acquired in the formal VTE system. The apprenticeship appeals mostly to individuals who lack the qualifications to gain access to the formal VTE system, or those who have dropped out of the system.7/ 7/ For a further description of the apprenticeship system, see Coulibaly (1986).
- 19 -

# 4. Formal Vocational and Technical Education

Formal VTE in C8te d'Ivoire is obtained mostly by Ivorian nationals living in cities (Table 6).8/ Less than 1% of the rural population has any VTE, while in Abidjan and other cities, 13.5X and 7% of the population, respectively, has received VTE. Thiere is a significant number of women among urban VTE graduates, ranging from 29% in other cities to 41X in Abidjan. for the most part, the education lasted one to three years. Nevertheless, in many cases, no diploma or certificate was obtained. This can be seen by comparing Table 6 with Table 5: In Abidjan, for example, 13.5X of people have received VTE, but only 5.8% report having a VTE diploma.

VTE is undertaken most often after a few years of secondary general education: 312 of people with VTE in Abidjan have completed the first cycle of secondary education, another 21% have 1-3 years of upper secondary education (Table 7). In other cities, however, and especially in rural areas, a larger percent of people than in Abidjan start VTE right after primary school, presumably gearing themselves towards the acquisition of a lower level of skills.

The combination of formal VTE and apprenticeships is quite rare in Abidjan, but 8% to 9% of people with VTE in the rest of the country have also served as apprentices.

- 8/ C8te d'Ivoire has a sizeable foreign population: in Abidjan, 24% of households are non-Ivorian; in other cities, 20%: and in rural areas, 132.
- 20 -

Table 6: INCIDENCE AND DURATION OF VTE

||Abidjan|Other<br>Cities|Rural|
|---|---|---|---|
||-<br>i|'<br>_||
|Percent of Population with VTE|13.5|7.0|0.9|
|(number of cases in sample)|(263)|(164)|(53)|
|Male|59.3|71.3|79.2|
|Female|40.7|28.7|20.8|
||100.0|100.0|100.0|
|Ivorian|90.5|96.9|96.2|
|Non-Ivorian|9.5|3.1|3.8|
||100.0|100.0|100.0|
|Duration (years)||||
|1|1.9|6.1|5.7|
|1|23.6|25.0|24,5|
|2|30.0|31.1|37.7|
|3|29.3|27.4|17.0|
|4-5|11.4|9.1|5.7|
|6+|3.8|1.2|9.4|
||100.0|100.0|100.0|
|% with also apprenticeship|2.3|8.5|9.4|
- 21 -

# Table 7: HIGHEST GENERAL EDUCATION GRADE COMPLETED BY VTE GRADUATES

|||Abidjan|Other Cities|Rural|
|---|---|---|---|---|
|Primary<br>|1-5|1.1|0.0|5.7|
||6|12.2|18.9|28.3|
|Lower Secondar|y 1|7.6|4.3|3.8|
||2|7.2|7.9|9.4|
||3|9.9|8.5|5.7|
||4|30.8|26.2|24.5|
|Upper Secondar|y1|6.8|8.5|5.7|
||2|4.2|4.9|5.7|
||3|10.3|13.4|11.3|
|University|1|0.4|1.2|0.0|
||2|2.3|3.0||
||3|2.3|1.2|_|
||4|2.3|0.6|_|
||5+|2.6|1.2|_|
|Total||100.0T|<br>100.0|100 0|
- 22 -

VTE is an important determinant of modern sector employment, as Table 8 indicates. In Abidjan, 57% of secondary level VTE graduates are employees for the government or for modern sector private enterprises. This figure rises to 81% for graduates of post-secondary VTE.<sup>9</sup> / In contrast, 21% of the people with only general education past the primary level hold such positions. A similar situation exists in other cities and rural areas. The percentage of economically inactive people among VTE graduates is also much below that among people with only general education. Nevertheless, the unemployment rates of VTE graduates are not low. In Abidjan, unemployment among VTE graduates is less than among people with post-primary general education, but it is much higher than unemployment among people with primary school or less. Private sector employment in Abidjan has indeeds been partticulatly hard hit by the recession of the eighties, and this may have had a proportionally larger impact on the employment opportunities of VTE graduates. This has induced a number of VTE graduates to opt for own account work instead.

9/ The small sample size of the CILSS clearly is a disadvantage for disaggregated analysis at this level: there are only 33 individuals in the sample with post-secondary VTE.
- 23 -

Table 8: RELATION BETWEEN WORK STATUS AND VTE

|||Educat|ional Achiev|ement|
|---|---|---|---|---|
||Primary|Post|primary gene|ral education|
||school<br>or less|only|+secondary<br>level VTE|+Post-secondary<br>level VTE|
|||A|bidjan||
|Government Employee|2.9|8.8|30.6|66.7|
|Private Sector Employee<br>|7.7|12.8|26.0|14.3|
|(Formal)|||||
|Private Sector Employee|7.6|7.0|2.8|0.0|
|(Informal)|||||
|Unpaid Family Worker|1.5|0.9|0.0|0.0|
|<br>Self-Employed|19.3|3.5|9.0|4.8|
|Inactive|54.7|47.6|15.8|4.8|
|Unemployed|6.1|19.4|15.8|9.5|
||100.0|100.0|100.0|100.0|
|(number in sample)|(982)|(227)|(177)|(21)|
|||Ot|her Cities||
|Government Employee|4.0|8.3|56.2|66.7|
|Private Sector Employee<br>|2.4|7.4|17.1|16.7|
|(Formal)|||||
|Private Sector Employee<br>|5.4|11.1|0.0|0.0|
|(Informal)|||||
|Unpaid Family Worker|18.6|12.0|1.9|0.0|
|Self-Employed|30.1|7.4|7.6|16.7|
|Inactive|38.9|50.9|13.3|0.0|
|Unemployed|0.6|2.8|3.8|0.0|
||100.0|100.0|100.0|100.0|
|(number in sample)|(1,298)|(108)|(105)|(12)|
|||Ru|ral Areas||
|Government Employee|0.1|3.2|53.3||
|Private Sector Employe|e 0.4|5.3|0.0||
|<br>||||_|
|(Formal)|||||
|Private Sector Employe|e 0.9|3.2|0.0|_|
|<br>(Informal)|||||
|Unpaid Family Worker|48.4|51.6|6.7|_|
|<br>Self-Employed|32.5|21.0|23.3|_|
|Inactive|17.7|15.8|16.7|_|
|Unemployed|0.0|0.0|0.0|_|
||100.0|100.0|100.0|_|
|(number in sample)|(4,502)|(95)|(30)|()|

Note: Figures exclude people currently enrolled.
- 24 -

# 5. Informal VTE: Apprenticeships

While formal VTE graduates almost all live in cities, 38% of people with apprenticeship training live in rural areas. The incidence of women among apprentices is lower than among VTE graduates, while that of non-Ivorians is much higher (Table 9). Apprenticeships also tend to last longer than formal training: in rural areas, 28% of apprenticeships last four years or more; in other cities, 31x; and in Abidjan, 33%. In other words, the average duration of an apprenticeship increases with degree of urbanization. This is due to both pressures from demand for VTE and lack of job opportunities in Abidjan as a result of the recession. Informal VTE absorbs people who dropped out of formal VTE or never gained access. Many people migrate to AbMdjan i-n seareh of schooling, so that demand for VTE is likely to exceed the access quotas to the existing facilities, and the unfulfilled demand raises the price, i.e., the duration, of the informal alternative. Many of the non-Ivorians who migrate to C^te d'Ivoire also find themselves unable to enter the formal VTE system (they often lack the prerequisite diplomas) and apprenticeships become their most attractive alternative.

Moreover, in a situation of job shortage, many trainees prefer to lengthen their apprenticeship rather than to become unemployed, at least when they receive wages in kind. Employers themselves tend to try and extend the duration of apprenticeships because the wages in kind are below the market wage of a regular worker, and certainly in the later years of apprenticeship, the trainee's marginal product is likely to exceed his compensation.
- 25 -

Table 9: INCIDENCE AND DURATION<sup>OF APPRENTICESHIPS</sup>

||Abidjan|Other Cities|Rural|
|---|---|---|---|
|Percent of Population<br>with Apprenticeship|13.4|11.5|5.7|
|(number of cases in sample)|<br>(261)|(271)|(325)|
|Male|69.7|73.8|82.5|
|Female|30.3|26.2|17.5<br>|
||100.0|100.0|100.0|
|Ivorian|78.5|84.1|84.6|
|Non-Ivorian|21.5|15.9|15.4|
||100.0|100.0|100.0|
|Duration (years)||||
|1|2.5|4.5|8.4|
|1|20.9|24.5|21.4|
|2|22.1|20.4|24.5|
|3|_zi.3_|19.7|18.0|
|4-5|20.1|19.3|13.7|
|6-9|10.2|9.7|10.6|
|10+|2.9|1.9|3.4|
|Total|100.0|100.0|100.0|
|% with also VTE|2.3|5.2|1.5|
- 26 -

Apprenticeships are undertaken by people with much less general education than VTE students (Table 10). In Abidjan, 40% of people who were trained as apprentices had no general education at all, and this was the case for more than half the trainees elsewhere. For those with some formal education, the main entry point into apprenticeship is after the primary curriculum.

Like VTE graduates, trainees from apprenticeships tend to channel themselves into a specific work status. In Abidjan, an apprenticeship - leads primarily to wage work in the informal sector i.e., the trainees will continue to work in a small enterprise, but for a wage (Table 11). This tendency is more distinct for apprentices with more general education. The second road that graduated apprentices take is to become self-employed. This option is more likely when little general education was received by the apprentice. Presumably, this is because relatively well educated apprentices continue to search for formal sector jobs and view their informal sector work as a temporary solution, preferable to unemployment. Apprentices with no or low education ma7 recognize that their chances for formal sector work are small and see own account work as their best option. Also, in view of the rising primary school enrollment in C8te d'Ivoire over the past two decades, people without education are likely to be older and have had more time to save funds and establish their own enterprise. The age factor can explain also why one finds quite a few people without educati.on or with only primary education but with apprenticeship training in the modern private sector. Ten to twenty years
- 27 -

# Table 10: HIGHEST GENERAL EDUCATION GRADE COMPLETED BY PEOPLE

# WITH APPRENTICESHIP TRAINING

|||Abidjan|Other Cities|Rural|
|---|---|---|---|---|
|None||40.2|51.7|58.5|
|Primary|1|1.1|1.1|2.5|
||2|2.3|2.6|4.9|
||3|6.5|3.7|4.0|
||4|5.7|4.4|5.2|
||5|6.5|8.9|4.9|
||6|24.9|19.2|16.3|
|Lower Secondar|y 1|4.6|2.6|2.1|
||2|3.8|2.2|0.3|
||3|2.3|1.1|0.9|
||4|1.5|1.5|0.3|
|Upper Secondar|y|0.4<br>|1.1|0.0|
|Total||1<br>100.0|100.0|100.0|
- 28 -.

# Table 11:

# RELATION BETWEEN WORK STATUS AND APPRENTICESHIP<sup>TRAINING</sup>

||||Educational|Achieveme|nt||
|---|---|---|---|---|---|---|
||No Edu|cation|Primary|Education|Post-Primar|y Educatio,|
||No<br>Apprenti-<br>ceship|Apprenti-<br>ceship|No<br>Apprenti-<br>ceship|Apprenti-<br>i_ceship|No<br>Apprenti-<br>ceship|<sup>Apprenti-</sup><br>cesltp|
||_~~~||Abi|djan||_|
|Government Employee|2.5|2.9|3.2|4.4|21.8|6.4|
|Private Sector Employee<br>(Formal)|4.1|17.3|6.8|15.9|19.0|9.7|
|Private Sactor Employee|3.1|21.1|2.5|27.4|2.3|38.7|
|(Informal)|||||||
|Unpaid Family Worker|1.9|2.9|1.1|<br>0.0|0.2|3.2|
|<br>Self-Employed|25.2|29.8|7.2|15.0|5.6|9.7|
|<br>Inactive|60.9|18.3|69.1|25.7|33.2|19.3|
|Unemployed|2.3|7.7|10.1|<br>11.5|17.8|12.9|
||100.0|<br>100.0|<br>100.0|<br>100.0|<br>100.0|<br>100.0|
|(number in sample)|(484)|(104)|(278)|(113)|(394)|(31)|
|I|||~~~~~|~~~~~~~Oth<br>Cit4ies|er||
|Government Employee|1.4|5.7|10.3|<br>5.8|36.1|13.0|
|Private Sector Employee<br>|<br>0.6|10.7|<br>3.4|<br>1.9|12.9|8.7|
|(Formal)|||||||
|Private Sector Employee|<br>1.8|9.3|4.6|28.8|3.5|21.7|
|(Informal)|||||||
|Unpaid Family Worker|15.6|22e.1|<br>23.7|<br>23.1|6.4|8.7|
|<br>Self-Employed|33.4|41.4|16.4|<br>26.0|6.4|21.7|
|<br>Inactive|46.8|10.0|<br>40.5|<br>13.5|32.2|17.4|
|Unemloed|04|0|1.1|<br>1.0|2.5|8.7|
|py|.<br>100.0|.<br>100.0|<br>100.0|<br> <br>100.0|<br>100.0|100.0|
|(number in sample)|(788)|(140)|(262)|(104)|(202)|(23)|
||||Rura|l Areas|||
|Government Employee|0.1|0.0|0.2|<br>0.8|17.0|0.0|
|<br>Private Sector Employee|<br>0.2|1.0|<br>0.5|<br>3.3|3.6|8.3|
|(Formal)|||||||
|Private Sector Employee|<br>0.7|2.6|<br>1.7|<br>0.8|1.8|0.0|
|(Informal)|||||||
|Unpaid Family Worker|48.1|27.9|<br>59.1|<br>38.0|<br>42.0|33.3|
|<br>Self-Employed|31.7|<br>61.0|<br>23.7|<br>51.2|<br>18.7|50.0|
|Inactive|19.1|<br>7.4|<br>14.8|<br>5.8|<br>17.0|8.3|
|<br>Unemloed|<br>00|<br> <br>0|<br> <br>00|<br> <br>0.0|<br>0.0|0.0|
|py|.<br>100.0|.<br>100.0|.<br>100.0|<br> <br>100.0|<br> <br>100.0|100.0|
|(number in sample)|(3,587)|(190)|(594)|(121)|(112)|(12)|

Note: Table excludes currently enrolled people.
- 29 -

ago the formal VTE possibilities were much more limited in C8te d'Ivoire than in recent years and apprenticeship training was a relatively better way to acquire skills than it is nowadays.

In rural areas, apprenticeships lead people more to setting up their own business, relative to people with the same general education background but without apprenticeship training. The latter are more likely to become unpaid family workers. The situation in other cities falls in between that of Abidjan and rural areas.

There is a specific concentration of occupations which apprentices select, relative to people with only general education, and others they avoid. In Abidjan, for example, almost two-thirds of people without education and without apprenticeship are in sales occupations, while only 14X of apprentices without general education do sales work. Apprentices are very well represented among metal workers, carpenters, tailors and mechanics, with the latter two categories alone absorbing more than one-third of the apprentices with some general education. Another concentration occurs in the transport sector, where apprentices work as drivers. In rural areas, the great majority of apprentices end up working in farming occupations.
- 30 -

# 6. Bank Involvement in the Education Sector in C8te d'Ivoire1O/

The Bank has made three education loans to the government of C8te d'Ivoire (Table 12). The First Education Project (1970) supported virtually all levels of the education system. When it was completed in 1977, it had achieved its principal objective of providing facilities for the increased output of trained manpower for industry, comerce, and agriculture. The project also contributed to general education through the construction of schools and by providing specialist services for the introduction of educational television in Cste d'Ivoire.

The Second Education Project, signed in 1975, focused on VTE by financing the construction of two teacher training centers and the upgrading and equipping of adult vocational training centers.

The Third Education Project, in 1979, was much larger than the previous loans, and included the construction of a model rural facility for VTE and community development. The bulk of the loan, however, financed the construction of four vocational high schools and four primary school teacher training centers.

The Bank's involvement in the education sector of CMte d'Ivoire has thus concentrated on formal VTE, especially on the provision of infrastructure. The Bank's role has been itaportant. The two technical 10/ I am thankful to Omporn Regel and Rosemary Rinaldi for their contribution to this section.
- 31 -

# Table 12: BANK EDUCATION LOANS TO COTE D'IVOIRE

# First Education Project (1970)

Cost: $19.1 million Loan: $11.0 million (raised to $13.2 million in 1975) Purpose: Construction and equipment of one adult training school, two secondary technical schools, two post-secondary technical schools, three general secondary schools, three primary school teecher training centers; construction of an Instldctional Television Production Center; various technical assistance.

# Second Education Project (1975)

Cost: $8.7 million Loan: $5.0 milliona Purpose: Construction and equipment of two primary school teacher training centers; equipment of four vocational training centers; various technical assistance.

# Third Education Project (1979)

Cost: $84.9 million Loan: $24.0 million (+ $19.5 million co-financing loan from AFDB) Purpose: Construction and equipment of four vocational high schools, four primary school teacher training centers, one community development training center; various

# technical assistance.
- 32 -

high schools, four of the seven vocational high schools and more than half of the primary school teacher training facilities were constructed with Bank financing.

In addition to the three education projects, the Bank has provided Project-Related Ttaining (PRT) as part of its lending operations in sectors as diverse as water supply, oil exploration, and health. Table 13 lists all Bank projects in the last five fiscal years (July 1981-June 1986) wlth PRT components. There is a wide variety of training covered, but most projects call for some form of on-the-job training locaily and training and study tours abroad.

Currently, the education sector in the C8te d'Ivoire faces several problems. The most important problem in the general education sector is the decline in enrollment rates, especially at the primary level. Enrollment growth in the first grade has fallen to 0.5% per year, while the school age population grows at 4.1% per year. Especially in rural areas, there is an increasing alienation from the school system, and consequently falling enrollment rates, because the system is perceived as not adapted to local needs.

In the VTE sub-sector, the main current problem is the imhalance between the supply capacity of the formal system and the demand for graduates. Formal VTE curricula are very much oriented towards the modern sector, and, as a result of the recession of the eighties, this sector has
- 33 -

# Table 13: IBRD/IDA LENDING FOR TRAINING IN COTE D'IVOIRE

(1982-1986) (US$ Million)

|Project<br>Name|Fiscal<br>Year|Total<br>Project<br>Cost|Loan/<br>Credit<br>Amount|Training<br>Componen<br>Cost|<br>t PRT<br>Lending|of PRT<br>Lendin|Description<br> <br>of PRT<br>g Component*|
|---|---|---|---|---|---|---|---|
|Oil Exploration|82|123.15|101.50|1.82|1.45|1.43|1|
|Technical Assistance|<br>82|24.64|16.00|1.10|1.10|6.88|2|
|Urban Development II|<br>82|104.00|<br>51.00|0.83|0.50|0.98|3|
|WaterSupplyII|82|57.30|43.00|2.50|2.25|5.23|4|
|Forestry II|85|51.60|31.30|0.25|0.25|0.80|5|
|Highway Sector II|85|230.68|110.00|1.14|0.60|0.55|6|
|Palm Oil V|86|145.20|<br>13.40|0.19|0.19|1.42|7|
|Indust. Development|<br>86|49.25|30.00|0.10|0.10|0.33|8|
|Health I|86|29.70|22.20|1.83|1.83|8.24|9|
|Telecommunications<br>II|<br> <br>86|116.70|<br>24.50|0.90|0.90|3.67|10|

*Description of PRT Component:

1. on-the-job training for technicians; training abroad with foreign oil companies.

2. on-the-job training of local ministerial staff (project and sector analysis); study trips and fellowships abroad.

3. training in traffic management for engineers and urban planners at National School for Public Works and abroad; driver training program; vehicle repair and maintenance training.

4. on-the-job and post-graduate training for technical staff and accountants. 5. in-service training for forestry, marketing, and accounting staff; driver training; local and foreign study tours.

6. basic training and refresher courseq for selected Ministry of Public Works staff.

7. development of training programs in agriculture, crop processing, administration, finance, commercial operations, and management.

8. training of staff of the Central and participating banks in economic analysis of projects.

9. management training for hospital staff, in-service training for all levels of health staff, field training for student nurses; fellowships abroad.

10. overseas training and fellowships for staff of National Office of Telecommunications.
34 -

-

been unable to absorb VTE graduates. The excess supply is most obvious among graduates of curricula geared towards the tertiary sector (business, accounting, secretarial skills, etc.). Yet, at the same time there is a shortage of graduates in certain technical and scientific fields, especially at the post-secondary level (Achio, 1983). In response to rising unemployment among VTE graduates, the government has reduced admission quota to VTE institutes to levels compatible with the anticipated ability of the public sector to absorb graduates. The result is a serious underutilization of existing facilities. There is a need to adapt the curricula of many VTE institutes so that graduates are also prepared for careers in tVe informal sector, e.g., as self-employed workers, and to provide complementary programs to facilitate this transition (e.g., the provision of credit to small-scale entrepreneurs).

Since 1981, the Bank has been preparing a Fourth Education Project. The long evolution of this project is largely due to institutional reorganizations within the government.1l/ Unlike its predecessors, this project would focus on increasing the efficient utilization of existing infrastructure, rather than adding to it. The proposed project would have four components: (1) improving management, and planning and budgetting capacity of the ministries of education.

_ll/_ Management of the education sector was the responsibility of 4 ministries until April 1983, when a unified Ministry of Education was created. In July 1986, the latter was abolished and 3 separate ministries were set up, responsible for primary education, technical and vocational education, and secondary and higher education.
- 35 -

- (2) increasing efficiency and effectiveness of existing

resources through reorganization, renovation, and better equipmnent of schools.

- (3) upgrading the quality of math and science in secondary

educrtion.

- (4) developing national capabilities for project preparation and

implementation.
> - 36 -

# 7. Ecopomic Assessment of VTE at the National Level

We begin the economic assessment of VTE in C8te d'Ivoire by presenting results of multivariate analysis at the national level. The next two sections of the paper will add regional and sectoral dimensions. We discuss first the effect of VTE on earninas (sec. 7.1) and on access to different kinds of work (sec. 7.2). Next, the structure of private and social costs associated with VTE is presented (sec. 7.3). This leads to the calculation of the interrial rate of return to VTE (sec. 7.4). Lastly, we discuss briefly the earnings of the self-employed (sec. 7.5), and summarize the main findings (sec. 7.6).

# 7.1 Earnings Analysis

The CILSS data allow the construction of two earnings measures:

-

- (1) Wi basic pre-tax cash earnings from the main job.

- (2) W2 - total pre-tax earnings from the main job - WI + bonus/commissions + wages-in-kind (food, housing, clothing, transport, other) from the main job.12/

- 12/ Respondents to wage questions in the CILSS could report either pre-tax -

- or post-tax income a follow-up question identified which they had reported. Unfortunately, information on taxes paid is only available at the household level. We pro-rated these taxes to reported individual incomes and added the amount of tax to incomes reported post-tax, so as to put all earnings figures on a comparable pre-tax basis. Some editing of the earnings data was done to recode outlying values. This involved less than 1X of the cases.
- 37 -

The C8te d'Ivoire is characterized by a sharp earnings differential between urban and rural areas: average base earnings from the main job in Abidjan are 4 times those in rural areas, average total earnings in Abidjan are 4.5 times those in rural areas (Table 14). The differential is most pronounced for the self-employed and smallest for informal sector employees. Earnings in Abidjan are also higher than those in other cities, except for employees in the formal private sector.<sup>13</sup> / Government employees command the highest salaries, except in other cities where employees in the formal private sector are at the top.

The payment of bonus/commissions and wages-in-kind is largely limited to the modern sector in urban areas. These payments make up about _20%_ of base wages, except 'or private sector employees in other cities for whom they constitute a hefty 37% of base wages. The reason for this high premium, as well as for the fact that private sector employees in other cities earn a higher base salary than their colleagues in Abidjan, is likely to be the enormous pull factor emanating from Abidjan. Without a higher remuneration and substantial bonuses and in-kind benefits, modern firms might find it very difficult to attract workers for their establishments outside Abidjan. In general, the labor market in other cities is much tighter than in Abidjan. The overall unemployment rate is only 3% as opposed to 19% in Abidjan.

- 13/ The distinction between the formal and informal sector was based on a series of questions in the CILSS specifically designed to elicit the degree of legal and institutional protection accorded to workers-with the absence of such protection being characteristic of the informal sector. The questions pertained to the existence of a written employment contract between worker and entexprise, the application of minimum wage laws, the existence of a union in the firm, and the receipt of various social security benefits (paid leave, paid sick leave, retirement fund, etc.).
# Table 14: MONTHLY EARNINGS BY EMPLOYMENT STATUS

|||Abidjan||Ot:|her<br>Citie|s|R|ural Are|as|
|---|---|---|---|---|---|---|---|---|---|
|Employment Status|WI|W2|W2/W1|WI|W2|W2/W1|WI|W2|W2/W1|
|Government Employee|<br>167,699|197,93|0 118.03|-<br>115,508|-CFAF-<br>142,91|7 123.73|110,447|118,345|107.15|
|Private Sector<br>Employee-Formal|111,606|133,52|9 119.64|141,103|1 193,94|9 137.45|70,578|78,981|111.91|
|Private<br>Sector<br>Employee-Informal|31,242|31,599|101.14|30,081]|30,870|102.62|23,701|25,490|107.55|
|Self-Employed|96,489|96,489|100.00|51,544|51,544|100.00|26,036|26,036|100.00|
|All|111,009|123,418|111.1|8 70,946|81,120|114.34|27,497|27,720|100.81|

Index

|Government Employee|100|100|-<br>68.88|72.21|-<br>65.86|59.79|-|
|---|---|---|---|---|---|---|---|
|Private Sector<br>Employee-Formal|100|100|-<br>126.4'1|145.25|-<br>63.24|59.15|-|
|Private Sector<br>Employee-Informal|100|100|-<br>96.28|97.691|-<br>75.86|80.67|-|
|Self-Employed|100|100|-<br>53.42|53.42|-<br>26.98|26.98|-|
|All|100|100|-<br>63.9]|<br>65.73|-<br>24.77|22.46|_|

See text for definitions of WI and W2. Index is calculated separately for each type of worker and for W1 and W2.
- 39 -

The explicit consideration of educational background reveals that C8te d'Ivoire is not only characterized by wide earnings disparities across locations but also within the same location (Table 15). In urban areas, the mean earnings of a person with post-secondary VTE is more than six times that of a person without VTE and with no more than primary general education. There appears to be a great premium to obtaining education past the primary level, although the relative contribution of secondary VTE vs. secondary general education is not directly obvious from the table. In other cities, graduates of secondary VTE earn significantly more than those with only secondary general education, but the reverse is true in Abidjan. This is again consistent with a tighter labor market in other cities. The multivariate earnings analysis below will have to bring out more clearly the contribution to earnings of each level and type of education.

One conclusion which Table 15 does bring out clearly is that acquiring VTE in an informal way, through apprenticeships, is a much less certain road to high earnings. For people with no education, an apprenticeship adds to their earning ability, but once any general education has been obtained, the role of an apprenticeship in enhancing earnings is unclear. The strongest positive effect occurs in rural areas where workers with primary education and an apprenticeship receive more than twice the earnings of those without either.
Table 15: MONTHLY EARNINGS (W2) OF WORKERS, ACCORDING TO EDUCATIONAL BACKGROUND

||Abidj|an|Oither<br>Ci|ties|Rural A|reas|All||
|---|---|---|---|---|---|---|---|---|
||CFAF|Index|<br>CFAF|Index|<br>CFAF|Index|CFAF|Index|
|Primary school or less, no VTE|71,943|100.0|55,870|100.0|26,122|100.0|38,756|<br>100.0|
|Post-primary<br>education, no VTE|182,488|253.7|130,228|233.1|66,080|253.0|143,161|<br>369.4|
|Post-primary<br>education +<br>secondary level VTE|176,938|245.9|187,221|335.1|97,879|374.7|173,101|<br>446.6|
|Post-primary education +<br>post-secondary<br>level VTE|483,781|672.4|346,690|620.5|__|__|440,162|1,135.7|
|No general education,<br>no apprenticeship|62,227|100.0|42,983|100.0|21,895|100.0|29,753|<br>100.0|
|No general education<br>+<br>apprenticeship|84,472|135.7|75,651|176.0|37,059|169.3|59,443|<br>199.8|
|Primary education,<br>no apprenticeship|72,178|116.0|64,993|151.2|37,069|169.3|51,756|<br>173.9|
|Primary education<br>+<br>apprenticeship|64,730|104.0|47,802|111.2|49,229|224.8|53,642|<br>180.3|
|Post-primary<br>education,<br>no apprenticeship|183,513|294.9|148,536|345.6|88,462|404.0|160,390|<br>539.1|
|Post-primary<br>education<br>**+**<br>|apprenticeship.|41,358|66.5|44,725<br>_|104.0|13,340|60.9|34,155|<br>114.8|
- 41 -

The Human Capital Model We now turn to the multivariate estimation of the private benefits to VTE and apprenticeships. We rely on the standard human capital framework which yields the following estimating equation (Mincer, 1974): lnWi - a + bSi + cEi + dEi<sup>2</sup> + ui (1) where, for the ith individual, W - wage earnings S - years of schooling E - years of work experience u - a random disturbance factor, and where a, b, c, and d are the model's parameters.

This model can easily be adapted to show explicitly the contribution of other than general education. In particular, for this study, we propose the following specification: lnWi - a + bSi + cEi + dEi<sup>2</sup> + eTi + fAi + ui (2) where T - years of vocational or technical education A - years of apprenticeship training, and e and f are the corresponding parameters.

With respect to years of schooling and training, equation (2) assumes that all years of schooling or all years of training contribute the
- 42 -

same amount to increasing earnings, and that no additional benefit is derived from obtaining diplomas or certificates. Existing evidence indicates that the returns to primary, secondary, and higher education differ in developing countries (Psacharopoulos, 1985). Also, employers often screen prospective employees and set starcing salaries - or sometimes entire remuneration schedules - based on their diplomas or certificates. We therefore also estimate the equation below: lnWi - a + bjSij + cEi + dEi2 + 1 ekTik + fAi + j gjDij + ui (3) where j indexes the type or level of schooling and k indexes the type or level of training (no differentiation can be made within apprenticeships); DJit a caLtu!grical variau±e _L-_ ij if cne dipiowma ror curriculum j was obtained, zero otherwise.14/ Means and standard deviations of the variables in the earnings function are shown in Table 16. Most of the human capital variables have already been discussed in Sections 3-5 of this paper. With regards to experience, the CILSS provides two direct measures: the time worked in the

- 14/ An alternative to this procedure would be to estimate equation (3) minus the T and A variables for four groups of people: those with only general education, those with T, those with A, and those with both T and A. This procedure has the advantage of capturing the interaction between training and education, but it has the disadvantage of not showing the effect of the number of years of training and of any diplomas obtained. In principle, this disadvantage could be overcome by estimating earnings functions for groups defined for each year of training and by whether or not a diploma or certificate was obtained. In practice, there are insufficient observations in the CILSS data to implement this procedure.
- 43 -

# Table 16: MEANS AND STANDAR **D** EVIATIONS OF EARNINC' ;,UNCTION VARIABLES

|Variables|Mean|SD|
|---|---|---|
|ln(W1)|11.12|1.09|
|ln(W2)|11.27|1.14|
|Years of Schooling|6.97|5.45|
|Years of Primary Schooling|4.24|2.66|
|Years of Secondary Schooling|2.33|2.68|
|Years of Higher Schooling|0.41|<br>1.41|
|Years of Work Experience-|9.19|7.91|
|Current Occupation|||
|Years of Work Experience-|1.52|3.45|
|Previous Occupation|||
|Years of Secondary VTE|0.86|<br>1.62|
|Years of Post-Secondary<br>VTE|0.08|0.43|
|Years of Teacher Training|0.13|0.54|
|Years of Apprenticeship<br>Training|0.71|<br>1.77|
|CEPE|0.22|0.42|
|BEPC|0.05|0.21|
|Secondary<br>VTE Diploma|0.22|0.42|
|Post-Secondary<br>VTE Diploma|0.04|0.19|
|Teacher Diploma|0.04|0.21|
|Other Diploma|0.07|0.25|
|Sex (1-<br>female)|0.19|0.39|
|Non-Ivorian|0.17|0.37|
|Seasonal Job|0.03|0.17|
|Number of Cases|500|<br>-|
- 44 -

current main occupation and the time worked in the previous main occupation, if any. This is greatly preferable to the customery proxy variable (age minus six minus years of schooling/training) which only measures potential experience. Moreover, in the C8te d'Ivoire, this proxy could underestimate actual experience for people without periods of unemployment or inactivity because many peorle combine schooling and work.15/ The dependent variable for the analysis is the natural logarithm of earnings. There is a debate in the earnings function literature as to what is the most appropriate time period for this variable (see for example, Blinder (1976) and the references in there). The main argument in favor of s.hort periods (day, hour) is tnat this Deat reflects the transaction price of labor and excludes the effects of the labor-leisure choice (see for example, Griliches, 1977). on the other hand, many workers get paid ovet longer time-units, which for them establishes the relevant transaction price since neither supply nor demand takes place in smaller units. The CILSS questionnaire gave respondents the choice of time-unit to report earnings. More than 90% of modern sector employees reported earnings on a monthly basis, and even in the informal sector, 55% of employees did so. This is not surprising since the Government of

- 15/ In eight cases, people reported work experience on their current job to equal or exceed their age. In about 1.5% of the cases, the difference between age and experience was less than 6 years. We considered those cases to be reporting errors for experience and capped experience at age minus 6 years.
- 45 -

C8te d'Ivoire publishes its payscales on a monthly basis, and frequently the private sector uses monthly terms in wage contracts. Hence, monthly earnings constitute the relevant transaction price for wage labor in C8te d'Ivore, since labor transactions and bargaining rarely take place in smaller time units. Hence, the earnings analysis below uses the log of monthly earnings as dependent variable.

The basic estimation results of equation (3) are reported in Table 17, with ln(W1) as dependent variable. On the average, a year of schooling adds 13% to earnings, which is more than a year of work experience does (Column 1). An average worker with ten years of schooling would receive a monthly starting salary of CFA 53,370, but an unschooled worker with ten years of experience would only earn CFA 31,729, which is 40% less. A year of primary education contributes least to raising - - earnings 7.5% per year while a year of secondary education raises earnings by 17.9% (Column 2). As can be expected, the effect of experience in the previous occupation is less than that in the current one (Column 3). A year of apprenticeship contributes 4% to earnings, which is much less than formal VTE. Within the latter, there are large differences by level: a year of secondary VTE adds 8.5% to earnings, but a year of teacher training adds 18.7% (Column 4).

An important issue is the role of diplomas and certificates in hiring and remuneration decisions. The results in Column 5 suggest that primary and lower secondary diplomas do not add significantly to earnings
Table 17: EARNINGS FUNCTION _(mnW,)_ - ALL EMPLOYEES

||(|1)|(|2)|(|3)|(4|)|(5|)|(|6)|
|---|---|---|---|---|---|---|---|---|---|---|---|---|
|Intercept|9.575|(110.3)|9.679|(107.9)|9.613|(103.4)|9.585|(99.7)|9.600|(99.9)|9.852|(83.3)|
|Years of Schooling|.131|<br>(20.1)|<br>_-|||-|-||-<br>_|-|-||
|Years of Primary Schooling|-|_|.075|<br>(4.7)|<br>.079|<br>(5.0)|<br>.071|(4.4)|<br>.037|(1.5)|<br>.022|<br>(0.9)|
|Years of Secondary Schooling|_|_|.179|<br>(9.9)|<br>.183|(10.1)|<br>.158|(7.9)|<br>.127|(5.1)|<br>.113|<br>(4.6)|
|Years of Higher Schooling|-|_|.142|<br>(4.9)|<br>_.'I-_|(4.6)|<br>.157|(5.1)|<br>.106|(2.5)|<br>.097|(2.4)|
|Years of Cuerent Job Experience<br>|.098|<br>(7.4)|<br>.101|<br>(7.6)|<br>.099|<br>(7.5)|<br>.097|(7.4)|<br>.094|(7.2)|<br>.088|(6.9)|
|(Years of Current Job Experience)<br>2|-.0019|<br>(4.0)|-.0019|<br>(4.1)|-.0018|<br>(4.0)|-.0018|(3.9)|-.0017|(3.8)|-.0016|(3.6)|
|Yearsof Previous Job Experience<br>|-|-|-|-|.041|(1.7)|<br>.033|(1.4)|.032|(1.3)|.025|(1.0)|
|(Years of Previous Job Experience)<sup>2</sup>|-|-|-|-|-.0013|<br>(0.7)|<br>-.0008|(0.5)|-.0006|(0.4)|-.0001|(0.1)|
|Years of Apprenticeship|-|-|-|-|-|-|.039|(1.9)|.042|(2.1)|.027|(1.3)|
|Years of Secondary VTE|-|-|-|-|-|-|.085|(3.4)|<br>.070|(2.3)|.071|(2.5)|
|Years of Post-Secondary VTE|-|-|-|-|-|-|.163|<br>(1.8)|.023|(0.2)|<br>.027|(0.2)|
|Years of Teacher Training|-|-|-|-|-|-|.187|<br>(2.7)|.157|(1.7)|.167|(1.9)|
|CEPE|-|-|-|-|-|-|-|-|.251|(1.6)|<br>.196|(1.3)|
|BEPC|-|-|-|-|-|-|-|-|.243|(1.0)|<br>.279|(1.2)|
|SecondaryVTEDiploma|-|-|-|-|-|-|-|-|.400|(2.1)|.325|(1.7)|
|Post-Secondary VTEDiploma|-|-|-|-|-|-|-|-|.970|(2.6)|.918|(2.5)|
|Teacher Diploma|-|-|-|-|-|-|-|-|.532|(1.8)|.547|(1.9)|
|Other Diploma|-|-|-|-|-|-|-|-|.727|(2.6)|.727|(2.7)|
|Sex(1-female)|-|-|-|-|-|-|-|-|-|-|-.135|(1.5)|
|Non-Ivorian|-|-|-|-|-|-|-|-|-|-|-.264|(2.7)|
|Seasonal Job|-|-|-|-|-|-|-|-|-|-|-.622|(3.0)|
|Abidjan|-|-|-|-|-|-|-|-|-|-|.091|(1.2)|
|Rural Areas|-|-|-|-|-|-|-|-|-|-|-.295|(2.4)|
|R2|.49||.51||.52||.54||.54||.58||
|R2|.49||.51||.51||.53||.53||.56||
|F|162.5||103.1||75.2||51.2||33.9||29.5||

Note: Absolute t - values In parentheses.
- 47 -

beyond the effects of the years of schooling. The situation is different, though, for VTE and other (mostly university) diplomas: each has a premium of at least 40% attached to it. Notice, however, comparing Columns 4 and 5 of the table, that the introduction of the diploma variables in the regression reduces the coefficients of all levels of schooling and formal training (i.e., excluding apprenticeship and on-the-job training). The drop is, hovmver, most pronounced for years of post-secondary VTE, whose coefficient in fact becomes insignificantly different from zero. Instead, a post-secondary VTE diploma has a very large earnings premium attached to it. This suggests that strong screen4ng takes place at that level and that employers value only completed post-secondary VTE curricula. In contrast, the secondary VTE diploma has a more modest earnings premium, but the length of secondary VTE remains an important determinant of earnings.

The last regression specification (Column 6) includes a few variables that test in an elementary way for the presence of labor market imperfections. The results give weak indication that women earn less than men. Non-Ivorians earn 26.4% less than Ivorians on the average. After controlling for human capital and demographic variables, wages in Abidjan are no longer significantly above those in other cities, but wages in rural areas are systematically below those of urban areas. Moreover, holders of seasonal jobs - most prevalent in rural areas - earn 62% less than others.16/ 16/ Seasonal job is defined by the nature of the work, not by the time - actually worked during the survey's reference period although jobs for which more than 40 weeks of work were reported were always considered to be non-seasonal.
- 48 -

We also estimated the same set of regressions with W2 - the total monthly wage, including bonus/commissions and income-in-kind - as dependent variable (Table 18). This raises the yields to a year of general schooling by 1-2% points. It lowers, however, the coefficients of all VTE variables, suggesting that bonuses and in-kind income are more received in jobs where the pre-requisites are general education. The observations we made when discussing the results for W1 remain qualitatively the same for W2, except that there is now stronger evidence of a wage gap between men and women not explained by the human capital variables in the regression. This reflects the fact that men receive more commissions, bonuses, and in-kind income than women - CFA 9,960 and 1,517, respectively, on the average.

# The Role of Selectionl

The results in Tables 17 and 18 were obtained using OLS estimation. This assumes, among other things, that the people for whom the estimation is made, i.e., wage-earners, are a random subset of the active population. If this assumption is not true, the coefficients of the earnings function may be biased, because they reflect not only the effects of the explanatory variables on wage-earnings but also on the probability to be a wage-earner. This problem, known as selection bias, can be solved by estimating separately a binary choice equation that determines the probability to become a wage-earner. Following a method suggested by Heckman (1976, 1979), this choice equation can be estimated by probit maximum likelihood, and the results used to estimate the so-called inverse
O s Table 18: EARNINGS FUNCTION (lnW2) - ALL F.MPLOYEES

||(|1)|(|2)|(|3)|(4|)|(5)||(|6)|
|---|---|---|---|---|---|---|---|---|---|---|---|---|
|Intercept|9.644|(109.7)|9.741|(107.0)|9.665|(102.6)|9.649|(98.6)|9.659|(98.7)|9.955|(82.4)|
|Years of Schooling|.139|(21.1)||-||-|-|-||-|-|-|
|Years of Primary Schooling|-|_|.087|(5.3)|.091|(5.6)|.082|(5.0)|.056|(2.2)|.042|(1.6)|
|Years of Secondary Schooling|_|_|.183|(9.9)|.188|(10.2)|.166|(8.1)|.141|(5.6)|.126|(5.1)|
|Years of Higher Schooling|-|_|.150|(5.1)|.142|(4.8)|.162|(5.2)|.127|(3.0)|.123|(3.0)|
|Years of Current Job Experience<br>|.103|(7.6)|.106|(7.8)|.104|(7.7)|.101|(7.6)|.099|(7.4)|.092|(7.0)|
|(Years of Current Job Experience)<sup>2</sup>|-.0020|<br>(4.2)|-.0020|<br>(4.3)|-.0019|<br>(4.1)|-.0019|(4.0)|-.0018|(3.9)|-.0017|(3.8)|
|Years of Previous Job Experience<br>|-|-|-|-|.054|(2.2)|<br>.046|(1.9)|.044|(1.8)|.036|(1.4)|
|(Years of Previous Job Experience)<sup>2</sup>|-|-|-|-|-.0020|<br>(1.2)|-.0016|<br>(0.9)|-.0014|(0.8)|-.0008|(0.5)|
|Years of Apprenticeship|-|-|-|-|-|-|.031|(1.5)|<br>.034|(1.6)|<br>.018|(0.9)|
|Years of Secondary VTE|-|-|-|-|-|-|.083|(3.3)|.066|(2.2)|.069|(2.3)|
|Years of Post-Secondary VTE|-|-|-|-|-|-|.163|(1.8)|<br>-.023|(0.2)|-.004|(0.0)|
|Years of Teacher Training|-|-|-|-|-|-|.129|(1.9)|<br>.109|(1.2)|<br>.112|(1.2)|
|CEPE|-|-|-|-|-|-|-|-|.192|(1.2)|.134|<br>(0.8)|
|BEPC|-|-|-|-|-|-|-|-|.119|(0.5)|.150|(0.6)|
|Secondary VTE Diploma|-|-|-|-|-|-|-|-|.346|(1.7)|.281|(1.4)|
|Post-Secondary VTE Diploma|-|-|-|-|-|-|-|-|.964|(2.5)|.876|(2.3)|
|Teacher Diploma|-|-|-|-|-|-|-|-|.413|(1.4)|<br>.420|(1.4)|
|Other Diploma|-|-|-|-|-|-|-|-|.516|(1.8)|<br>.508|(1.8)|
|Sex (1-female)|-|-|-|-|-|-|-|-|-|-|-.204|(2.3)|
|Non-Ivorian|-|-|-|-|-|-|-|-|-|-|-.275|(2.7)|
|Seasonal Job|-|-|-|-|-|-|-|-|-|-|-.622|(2.9)|
|Abidjan|-|-|-|-|-|-|-|-|-|-|.039|(0.5)|
|Rural Areas|-|-|-|-|-|-|-|-|-|-|-.283|(2.3)|
|R<sup>2</sup>|.52||.53||.54||.55||.56||.59||
|R2|.51||.52||.53||.54||.54||.57||
|F|176.2||110.6||81.2||54.2||35.8||30.7||

Note: Absolute t - values in parentheses.
- 50 -

Mills-ratio, lambda. Lambda captures the probability to be included in the sample as a wage-earner, and the inclusion of lambda as a regressor in the earnings function corrects for the non-randomness of the selection into wage-earner status, so that consistent estimates are obtained for the earnings function.17/ To check for the presence of selection bias in the CILSS sample of wage-earners, we re-estimated the earnings equation with lambda included (the choice equation will be discussed in section 7.2). The results in Table 19 indicate the presence of a significant negative selection factor into the status of wage-earner. This factor diminishes as the specification is made more complete, which points at the role of the added variables-diplomas and demographic variables--as elements in the selection.

The coefficient of lambda represents the covariance between the error terms of the choice equation and the error terms of the earnings equation. A negative coefficient thus means that whichever unobserved factors exist that increase the probability to become a wage-earner also contribute to the likelihood that a person will earn a below average wage. If we accept that people choose their status of employment in a way which maximizes their earnings potential, then we should observe positive selection. One interpretation of the negative selection into employee status in Cote d'Ivoire is therefore that barriers to entry exist and/or 17/ For a further theoretical discussion of this two-step estimation method, see Maddala (1983). An application of the technique in labor market analysis can be found in Grootaert (1986b).
- 51 -

# Table 19: EARNINGS FUNCTION (InW2 ) - ALL EMPLOYEES - CORRECTED FOR SELECTION BIAS

||(1|)|(2|)|(3|)|
|---|---|---|---|---|---|---|
|Intercept|10.210|(74.2)|10.182|(73.2)|10.329|(52.6)|
|Years of Primary Schooling|.046|(2.7)|<br>.041|(1.7)|<br>.031|(1.2)|
|Years of Secondary Schooling|.143|(7.1)|<br>.131|(5.3)|<br>..27|(5.2)|
|Years of Higher Schooling|.151|(4.9)|<br>.123|(2.9)|<br>.130|(3.2)|
|Years of Current Job Experience<br>|.085|(6.6)|<br>.085|(6.6)|<br>.084|(6.5)|
|(Years of Current Job Experience)<sup>2</sup>|-.0015|<br>(3.3)|<br>-.0014|<br>(3.3)|<br>-.0015|<br>(3.2)|
|Years of Previous Job Experience<br>|.041|(1.7)|<br>.038|(1.6)|<br>.040|(1.7)|
|(Years of Previous Job Experience)<sup>2</sup>|-.0012|<br>(0.8)|<br>-.0010|<br>(0.6)|<br>-.0012|<br>(0.7)|
|Years of Apprenticeship|.012|(0.6)|<br>.014|(0.7)|<br>.014|(0.7)|
|Years of Secondary VTE|.063|(2.5)|<br>.059|(2.0)|<br>.064|(2.2)|
|Years of Post-Secondary VTE|.141|(1.6)|<br>-.039|(0.3)|<br>-.008|(0.1)|
|Years of Teacher Training|.099|(1.4)|<br>.102|(1.1)|<br>.088|(1.0)|
|CEPE|-|-|.051|(0.3)|<br>.031|(0.2)|
|BEPC|-|-|-.019|(0.1)|<br>-.016|(0.1)|
|Secondary VTE Diploma|-|-|.124|(0.6)|<br>.115|(0.6)|
|Post-Secondary VTE Diploma|-|-|.713|(1.9)|<br>.634|(1.6)|
|TeacherDiploma|-|-|.147|(0.5)|<br>.148|(0.5)|
|OtherDiploma|-|-|.286|(1.0)|<br>.290|(1.0)|
|Sex (1-female)|-|-|-|-|-.079|(0.8)|
|Non-Ivorian|-|-|-|-|-.289|(3.0)|
|SeasonalJob|-|-|-|-|-.567|(2.8)|
|Abidjan|-|-|-|-|-.064|(0.7)|
|RuralAreas|-|-|-|-|-.042|(0.3)|
|Lambda|-.333|(5.4)|<br>-.313|(4.9)|<br>-.258|(2.5)|
|R2|.57||.57||.59||
|R2|.56||.56||.57||
|F|54.16||36.20||29.71||

Note: Absolute t - values in parentheses.
- 52 -

that the actual selection process of employees is such that the most productive people (with productivity being reflected in earnings) are not being selected into wage-employment.

Comparing the basic OLS coefficients in Column 6 of Table 18 with the selection-corrected coefficients in Column 3 of Table 19, one notices that the differences are fairly minor as far as the human capital variables expressed in years are concerned. The significant coefficients differ by .01 or less, which in a semi-logarithmic equation means a difference of about 1% on the predicted wage. There are, however, also a few major differences. In particular, the coefficients of post-secondary VTE diploma and other diploma are much smaller when selection is taken into account. This is because these diplomas have an important role in gaining access to wage employment. Their net effect of earnings is thus much smaller than what the OLS equation had suggested.

It is also important to note what happened to the demographic vaiables. The "wage-gap" due to sex disappears when selection is considered, i.e., sex is an important determinant of access to wage employment, but not of wage-levels once access has been gained. The opposite is true for nationality; after selection is taken into account, the wage differential increases slightly.

The overall conclusion is that it is important in the case of Cbte d'Ivoire to take selection issues into account when estimating earning functions. The net contribution of human capital variables to earnings,
- 53 -

especially of diplomas, cannot be obtained from OLS estimates. In the calculation of the internal rates of return below, we will therefore use the selection corrected earnings function.

- Figures 2 5 show selected earnings/experience profiles based on the earnings equation in Table 19 (column 3). Figure 2 brings out the effects of the years of experience in a job prior to the current one. Figure 3 shows the earnings profiles of apprenticeship graduates with different levels of general education. Figure 4 brings out the effects of secondary level formal VTE on graduates with primary and lower secondary general education. Figure 5 displays the earnings profiles of postsecondary VTE and teacher training graduates with and without diploma.

# 7.2 Access to Wage Employment

The results of the selectivity correction procedure in the previous section make it clear that human capital is not only a determinant of earnings in C8te d'Ivoire, but also determines access to wageemployment. The probit equation that was used to derive the lambda's is shown in Table 20. The equation models the choice between own account work and work for wages, under the assumption that individuals try to maximize the returns to their education and training but taking into account both constraints and opportunties that exist as a result of their demographic
- 54 -

Figure 2 EFFECT OF PREVIOUS JOB EXPERIENCE <!-- Start of picture text --> 210<br>200<br>190<br>170<br>15<br>C 1/A40 -<br>130<br>E 120<br>Il<br>100 -<br>-<br>90<br>so<br>70<br>110pevosjo a xerec<br>0 10 2030<br><!-- End of picture text --> Years of current job experience

**-** a) no previous job experience + **-** 5 years of previous job experience 0 **-** 10 years of previous job experience
- 55 -

Figure 3

# APPRENTICESHIPS WITH NO GEN EDUC

<!-- Start of picture text --> 110-<br>100-<br>Go<br>170 .Xan~~~~l<br>JSO<br>.. 10 X 0<br><!-- End of picture text -->

# APPRENTICESHIPS WITH PRIM EDUC

<!-- Start of picture text --> 130 -<br>I l<br>JSO<br>0 10 20<br>09m' JL -<br><!-- End of picture text --> o - 2 years of apprenticeship training I - 4 years of apprenticeship training - 6 years of apprenticeship training
- 56 -

Figure 4

# SECONDARY VrEW/ PRIM EDUC

<!-- Start of picture text --> lo<br>140-<br>130-<br>120-<br>10 0<br><!-- End of picture text --> SECONDARY VrE W/ LOWER SEC EDUC <!-- Start of picture text --> 20 .<br>Go e<br>140Doo<br>1 10<br>go-<br>170<br>-<br>no oT<br>10 10-03<br>MO -VT<br>+ - 3 years of secondary VTE<br>O - 3 years of secondary VTE + diploma<br><!-- End of picture text -->
- 57 -

### F&Sure 5

## POST-SECONDARY VrE

<!-- Start of picture text --> U0~~~~~~~~~~~~~~~~~3<br>oo~~~~~~~~~~~~~~~~~ f<br>I<br>1700-<br>0 10 3J<br>t80-<br>to -_<br>1400-<br><!-- End of picture text -->

# TEACHET **R** AINING

<!-- Start of picture text --> so<br>90 .03)m .1 1m*<br>270<br>I-~^_<br>so<br>0 10<br>a I y + 130 3p+o<br><!-- End of picture text -->
- 58 -

Table 20: CHOICE OF EMPLOYMENT STATUS - PROBIT RESULTS

|Intercept|-2.67|(8.2)|
|---|---|---|
|Years of Primary Education|.028|(1.2)|
|Years of Secondary Education|-.048|(1.2)|
|Years of Higher Education|-.049|(0.5)|
|Years of Secondary VTE|.091|(1.7)|
|Years of Other VTE|.473|(2 0)|
|Years of Apprenticeship|-.010|(0.5)|
|CEPE|.669|(4.1)|
|BEPC|1.15|(3.5)|
|Secondary VTE Diploma|1.27|(4.5)|
|Other VTE Diploma|2.29|(3.6)|
|Other Diploma|1.53|(2.9)|
|Age<br>|.133|(7.0)|
|(Age)<sup>2</sup>|-.0018|(6.8)|
|Female Without Child 5 years|-.947|(5.5)|
|Female With Child 5 years|-.970|(9.5)|
|Non-Ivorian|.052|(0.5)|
|Years of Residence Since Migration<br>|.017|(1.4)|
|(Years of Residence Since Migration)<br>2|-.0006|(1.7)|
|Household Enterprises|-.363|(7.4)|
|Abidjan|.762|(7.3)|
|Rural Areas|-1.37|(13.8)|
|Log-likelihood|-636.34||
|Chi-squared|1893.6||
|Significance<br>level|0.1E-6||
|Number of cases|4597||
|% correct predictions|95||

Note: Coefficients pertain to the likelihood to become a wage-earner. Absolute asymptotic t-values are in parentheses.
- 59 -

characteristics (age, sex, ethnic group and migrant status), as a result of household characteristics (presence of small children, existence of household enterprises), and as a result of their location.

The results bring out sharply the role of diplomas in obtaining wage-employment. Especially a teacher or post-secondary VTE diploma enhances the likelihood to work as an employee, but all diploma variables have large and significant positive coefficients. There is thus strong evidence of credentialism in the labor market in C8te d'Ivoire. Informal VTE under the form of apprenticeships is not a relevant factor in the choice of work status.

As to demographic variables, the chances to be employee increase with age, up to age 37. The sex-variable has been split here to reflect whether or not a woman had children less than 5 years of age in her household. It is often argued that the presence of such small children is an impediment to women's participation in the labor force, and we wanted to see whether it also affected women's choice of employment status. The coefficients indicate that woman have a much lower probability to obtain wage-work than men, but the presence of infant children has only a small add'tional negative effect. Ethnic group is not an important determinant of employment status, but as we saw earlier non-Ivorians do have significantly lower wage-earnings than Ivorians. Both recent and long-term migrants are most likely to work for their own account. The probability to be an employee peaks after 13 years of residence.
- 60 -

The presence of a household enterprise obviously makes it more likely that one stays away from wage-work. Lastly, the coefficients of the location variables reflect the higher incidence of wage-work in Abidjan relative to other cities, and the lower incidence in rural areas.

## 7.3 The Costs of VTE

From the point of view of the student (or the household to which he/she belongs), the cost of attending a VTE 'rogram or school consists of the out-of-pocket costs for tuition, books, materials, transport to and from school, etc. as well as the opportunity cost of the wages foregone by attending. These costs are to be diminished by any scholarships and allowances received from outside the household. The private costs of VTE are thus: out-of-pocket costs

- schclarships

+ opportunity costs

# private costs

From society's point of view, one must add tu private costs all institutional costs, i.e., public spending for teacher salaries, administration and operation of the school system, scholarships, and the amorti2ation of buildings and equipment. The social costs of VTE are thus: institutional costs **+** private costs (except tuition) social costs
- 61 -

Tuition is subtracted from the private costs in this calculation because it is merely a payment by the student of part of the institutional costs, and that part of costs would otherwise be double-counted. Notice also that since private costs are net of scholarships, the latter are counted among the institutional costs.

Private Costs Information on out-of-pocket costs is available from the CILSS for students who are currently enrolled or were enrolled in the year preceding the survey. Those costs include tuition payments, expenditures for books and other school materials, transportation to and from school, food and lodging at school, uniforms, and miscellaneous contributions. The survey also recorded the amounts of any scholarships received. Table 21 indicates that annual out-of-pocket costs are highest for post-secondary VTE. They are 26% higher than those for teacher training, which in turn are 13% above secondary VTE costs. However, scholarships received compensate 69% of these costs for post-secondary level students, 26% for teacher trainees, but only 14% for secondary level students. As a result the net out-of-pocket costs are lowest for post-secondary students - they are only about half the costs for secondary level VTE students.

Opportunity costs consist of the wages foregone as a result of attending a VTE school or program. They were calculated on the basis of the earnings equation reported in Table 19 which corrects for selection
l

# Table 21: ANNUAL PRIVATE COSTS OF VTE (PER STUDENT) (CFAF)

||Seconda|ry Level|Post-sec<br>Leve|ondary<br>l|Teacher|Training|<br>Apprenticeships|
|---|---|---|---|---|---|---|---|
|Out-of-pocket Costs|163,426||232,435||184,886|||
|Scholarships|22,328||161,414.||48,602||__|
|Net out-of-pocket Costs|141,098|(23.43)|<br>71,021.|(5.8%)|136,284|(14.8%)X||
|Opportunity Costs|461,796|(76.6%)|1,155,732|(94.2%)|783,684|(85.2%)|426,240 (100.0%)|
|Total Private Costs|602,894|(100.0%)|1,226,753|(100.0%)|919,968|(100.0%)|426,240 (100.0%)|
- 63 -

bias due to the fact that inclusion in the employee group is not a random event. Since the opportunity cost calculation is a prediction of what someone would have earned had he/she become a wage earner instead of going to school, the predicted opportunity wage must take into account the probability to become a wage earner. This is precisely what the selection correction accomplishes.

To calculate the opportunity wage, the education variables in the equation were set equal to the entrance requirements for a given type of VTE and the other variables to the all sample mean for the relevant age group. For example, the opportunity wage for secondary level VTE students wzan calculated for a person who completed six years of primary school, had obtained a CEPE, and whose personal characteristics were those of the average 13- to 19-year-old. The opportunity cost in Table 21 is the average of what such a person could have earned annually, while gaining a work experience equal to the average length of the VTE curriculum.18/ Table 21 shows that foregone wages are a far more important cost than out-of-pocket expenses. The share of opportunity cost in total

- 18/ In some countries, VTE curricula include part-time work in enterprises as on-the-job training. If students receive a wage for such work, it has to be subtracted from the opportunity cost. In C8te d'Ivoire, most of the practical training in VTE is done in school. Only a few fields at the post-secondary level involve some in-enterprise training. Since we do not have direct data on the wages received during such training, we preferred not to make an arbitrary correction. Given the limited amount of such training relative to total class time, the correction would have been quite small at any rate.
- 64 -

private cost increases with the level of VTE, up to 94% in the case of post-secondary VTE. The total private cost of the latter is more than twice that of secondary VTE.

The cost figures for apprentices are approximate, because many apprentices receive room and board, the value of which should be subtracted from foregone wages. On the other hand, some apprentices have to pay a fee. Unfortunately, we have no direct data on the value of room and board, nor on the amount of the fee. Since the apprentices who pay fees are fewer than those who receive room and board, on balance the calculated opportunity cost is likely to be an overestimate. We shall return to this problem when we perform a sensitivity analysis on the cost calculations.

# Institutional Costs

The calculation of institutional costs for the VTE system in C8te d'Ivoire was a fairly demanding exercise, mainly because of the complex structure of the system (see section 3) to which is added an even more complex system of budget administration. In particular, major cost components, such as the salaries and benefits of expatriate staff, the housing allowances of Ivorian staff, and certain scholarships are not managed by the Ministry of Vocational and Technical Education or by the relevant institute or school, and hence do not appear on their budgets. The calculations thus needed to rely on a variety of sources such as budget data from various ministries, institutes and schools, payroll data, direct
- 65 -

data on technical assistance, and data on enrollment and the number and type of teachers. The details of the institutional cost calculations are in Appendix 3 and here we present only the summary results in Table 22.

Four main categories of expenditures are distinguished.

Personnel expenses include salaries and benefits of Ivorian and expatriate staff. For the latter only the part of salaries and benefits assumed by Cbte d'Ivoire (71.5Z) is included in the calculations. Operating expenses include spending for utilities, communications, transportation, office and school materials, maintenance, school lunch programs, etc. Purchases of equipment is included here if its estimated life span is one year or less. Scholarships include cash payments to students as well as the salaries of teachers who are on paid leave to attend courses to upgrade their qualifications. All cost figures pertain to 1987 budgets, and enrollments are those for the 1986-87 school year. The use of budgets as a data source rather than actual expenditures is necessitated because the latter are only available with a lag of several years. However, in the current climate of fiscal austerity in C8te d'Ivoire, requests for funding above originally approved budgets are rarely granted. Hence the 1987 budget should be a reliable indicator of 1987 expenditures. The amortization figures assume an economic life of 20 years for buildings and 5 years for equipment. Where applicable, the figures are based on construction and purchases that took place under the Bank's Third Education Project.

Several features of the composition of costs are noteworthy. First, a large share of personnel expenses goes to expatriate staff. At
Table 22: ANNUAL INSTITUTIONAiL COSTS OF VTE ('000 CFAF)

||Secondary<br>Level|Post-secondary<br>Level|Teacher Training|
|---|---|---|---|
|Personnel Expenses<br>- Ivorian Staff<br>- Expatriate Staff|6,319,863<br>2,794,434|1,540,040<br>i,387,725|3,044,057<br>2,641,751|
|Operating Expenses<br>Scholarships|4,167,548<br>150,200|1,933,000<br>694,650|1,212,460<br>2,456,205|
|Total|13,432,045|5,555,415|9,354,473|
|(Enrollment)|(7,545)|(1,250)|(3,935)|
|Recurrent Cost per Student|1,780.258|4,444.532|2,377.248|
|Amortization<br>(per Student)|505.711|2,874.983|690.582|
|Total Cost per Student|2,285.969|7,319.315|3,067.830|

Source: See tables in Appendix 3.
- 67 -

the secondary level and in teacher training institutes an eynatriate staff costs the C8te d'Ivoire up to twice as much as a local instructor. Expatriates make up about 1/4 of the teaching staff (Table 23), but account for 31% of personnel expenses at the secondary level and 46% in teacher training institutes. At the post-secondary level, the cost of an Ivorian irstructor is about the same as that of an expatriate.

The C8te d'Ivoire has traditionally relied on a large foreign presence, mostly French technical assistants, among its teaching staff and in government service in general. Since the early eighties, however, the country has embarked on an "Ivorianization" program which has greatly reduced the numbers of expatriates in government and teaching positions. As Table 23 shows, in the VTE system, technical assistants are still most present in technical high schools, at the ENS, and at the post-secondary level in general. Further reductions in foreign staff would lead to significant cost savings, except at the post-secondary level.

A second feature of the institutional costs of VTE in C8te d'Ivoire is the high level of scholarships paid at the post-secondary level: 555,720 CFAF per year per student, which is about three times the GNP per capita. By contrast, at the secondary level, the average annual scholarship is only 19,907 CFAF. In teacher training institutes, the scholarships per student are, however, even higher than in post-secondary VTE, largely as a result of the practice of giving primary and secondary
# Table 23: COMPOSITION OF TEACHING STAFF IN VTE INSTITUTES (1986-87)

|||||Technical|Assistant|s|||
|---|---|---|---|---|---|---|---|---|
||Ivorian|Staff|Coop<br>Con|eration<br>tract|Loc<br>Cont|al<br>ract|T|otal|
||n|%|n|X|n|X|n|%|
|Secondary Level|||||||||
|Technical High School|159|(56.6)|115|(40.9)|7|(2.5)|281|(100.0)|
|Vocational High School|242|(69.5)|L02|<br>(29.3)|4|(1.2)|348|(100.0)|
|Techmical College|172|(91.0)|16|(8.5)|1|(0.5)|189|(100.0)|
|Vocational Training Center|149|(89.9)|16|(9.6)|1|(0.6)|166|(100.0)|
|Other Training Center|39<br>761|(88.6)<br>(74.0)|5<br>:i54|(11.4)<br> (24.7)|-<br>13|_<br>(1.3)|44<br>1,028|(100.0)<br>(100.0)|
|Post-secondary Level<br>INSET|146|(52.1)|L24|<br>(44.3)|10|(3.6)|280|(100.0)|
|IPNETP|32<br>178|(45.7)|38<br>-2|(54.3)<br>4(50.9)<br>(46.3)|-<br> <br>To|_<br>(2.8)|70<br>350|(100.0)<br>(100.0)|
|Teacher Training<br>CAFOP/ENI|353(1)|(74.0)|iL00|(1)(21.0)|<br>24(1)|(5.0)|477|(100.0)|
|ENS|102|(49.8)|83|(40.5)|20|(9.8)|205|(100.0)|
||455|(66.7)|:[i|3(26.8)|44|(6.5)|682|(100.0)|
|Adult Training Centers|122|(75.8)|33|(20.5)|6|(3.7)|161|(100.0)|
|Total|1,516|(68.3)|632|(28.5)|73|(3.3).|2,221|(100.0)|

(1) Estimated figures.
- 69 -

school teachers one or two years of leave, with payment of full salary and benefits, so that they :an upgrade their quaiifications.1D Total institutional costs per student differ widely for each level of VTE. They are lowest at the secondary level: 2,285,969 CFAF per - year ($7,620 at $1 300 CFAF). As a frame of reference, it can be pointed out that in 1984 the C8te d'Ivoire's GNP per capita was $610. Teacher training costs per student are 3,067,830 CFAF per year ($10,226) and post-secondary VTE costs are 7,319,315 CFAF ($24,398).

- Apart from the two factors already mentioned the high cost of expatriate teaching staff and the high level of scholarships - two further elements contribute to these elevated unit costs. First, almost all VTE facilities are currently underutilized. The economic recession in C8te d'Ivoire since 1982 has reduced the demand for VTE graduates. We referred earlier to the high percentage of VTE graduates among people without a job, and in response to that situation the government has reduced entrance quotas. This has drastically raised unit costs, since no matching lay-offs in teaching staff were made. For example, the annual cost per student in a vocational high school (the most expensive type of secondary institution)

- 19/ The amount of scholarship per student derived from institutional cost data norresponds with that derived from the CILSS for secondary level students (see Table 21). At the post-secondary level, the CILSS figures are much below those computed from institutional budgets, suggesting either underreporting of scholarships by survey respondents, or, more likely, that the CILSS sample of post-secondary VTE students was too small to be representative of the student body as a whole. For teacher training, the figures caa-;tot be compared because teachers on paid leave would have reported their salary as such and not as a scholarship.
- 70 -

is 3,312,449 CFAF. If such schools were filled to capacity, the unit cost would drop to just below 2 million CFAF (at current total expenditure levels).

Second, the costs of buildings and equipment are exceptionally high at the post-secondary level. Amortization of these adds 65% to unit costs. This is a result of the transfer undertaken since 1980 of many post-secondary VTE institutions to Yamoussoukro, the C8te d'Ivoire's new capital. This required the construction of an entire new campus for INSET. This transfer process continues and will no doubt keep post-secondary VTE costs at very high levels.

# 7.4 Internal Rate of Return

The private and institutional cost data discussed in section 7.3 are the building blocks to calculate the cost streams of VTE. Table 24 shows the private and social costs per student per year of VTE.

The social costs are four to five times higher than the private costs in the cases of secondary VTE and teacher training. The high institutional costs of post-secondary VTE make that the social costs are almost seven times the private costs. Since there are no institutions associated with apprenticeships, social costs equal private costs. The duration of the cost stream was calculated as a weighted average (weighted
l

# Table 24: BENEFIT AND COST STREAMS FOR VTE GRADUATES (CFAPF)

||Secondary<br>Level|Post-<br>Secondary<br>Level|Teacher<br>Training|Apprenticeships|
|---|---|---|---|---|
|Benefits|||||
|Starting Salary Increment<br>Final Salary Tncrement<br>Duration of Benefit Stream (Years)|195,396<br>625,011<br>35|684,264<br>2,110,327<br>37|327,014<br>1,080,977<br>32|24,215<br>77,455<br>35|
|Costs I/|||||
|Private Costs|602,894 (100)|<br>1,226,753 (100)|<br>919,968 (100)|426,240 (100)|
|Social Costs|2,831,395 (470)|<br>8,450,783 (689)|<br>3,920,142 (426)|426,240 (00)|
|Duration of Cost Stream (Years)|2.79|3.09|3.20|3.05|

1/ Index in parenthesis.
- 72 -

by the number of students) of the length of the various curricula that exist within each of the distinguished levels of VTE.<sup>20</sup> / The benefit streams are the streams of salary increments resulting from the received education. They were computed from the earnings equation in Table 19 in which the relevant VTE variables were set at zero to obtain the non-VTE earnings stream and then at the values corresponding to the completion of a VTE cycle to obtain the VTE earnings stream. The differences between the two streams is the benefit stream of a given type of VTE.<sup>2 1</sup> / Table 24 shows the starting and final values of the benefit stream for each type of VTE.

The duration of the benefit stream depends on the average age of graduation and the retirement age. In C8te d'Ivoire, the latter is 55 years for all employees, except upper level staff, for whom it is 60 years. We therefore assumed the latter age to apply to graduates of post-secondary VTE.

- 20/ When students repeat grades, the actual average duration of a curriculum will exceed the intended duration. Since we had no data on repetition rates, we were unable to adjust the cost streams to take account of repetition.

- 21/ The calculation of the benefit streams in this fashion means that the benefit streams apply to VTE graduates who obtain wage employment, which is the case for the vast majority (see Table 8). Two refinements to the calculation could, however, be considered: (i) the benefit streams could be computed as a weighted average of earnings of employee graduates and earnings of self-employed graduates (see, however, the caveat in section 7.5 regarding the analysis of the earnings of the self-employed); and (ii) the benefit streams could be corrected for the probability of VTE graduates to be unemployed. This requires, however, information on the average duration of unemployment, which cannot be derived from the CILSS.
- 73 -

The internal rate of return (IRR) is that rate of discount which equates the present value of cost and benefit streams. It reflects the return, over the life time, of the investment in education made by the individual and by society. The IRR can be calculated by solving the following equation for r: j n Ci - E B i-1 (l+r)Tl i-j+1 (1+r)7 Where Ci - costs Bi - benefits

- i - the number of years 1,..., ,..., n with j being the number of years until graduation, and n being the number of years between retirement and the start of the curriculum in question.

The results in Table 25 reveal very high private rates of return for formal VTE but very low social rates of return. The private return from post-secondary VTE is 21%, well above returns available in C8te d'Ivoire from many other private investments. On the other hand, the social return is a mere 4Z, well below the social opportunity cost of capital (usually estimated around 10X). The returns to secondary VTE and teacher training are similar: private returns are around 15X and social returns just below 4%. Apprenticeships have a mere 2.32 return.

In view of the fact that a number of assumptions were necessary to perform the cost calculations, we did a sensitivity analysis by varying the estimated cost streams by 25%, up and down. This produced a 6-7
- 74 -

# Table 25: INTERNAL RATES OF RETURN FOR VTE

||Secondar<br>Level|Post-<br>y Secondar<br>Level|y Teacher<br>Training|Apprenticeships|
|---|---|---|---|---|
|Social Rate of Return|||||
|Base Case|3.86%|4.37%|3.77%|2.34%|
|Costs+25%|2.66%|3.18%|2.50%|1.23%|
|Costs- 25%|5.54%|6.04%|5.54%|3.87%|
|Private Rate of Return|||||
|Base Case|15.84%|21.24%|15.15%|2.34%|
|Costs+25%|13.51%|18.28%|12.89%|1.23Z|
|Costs- 25%|19.35Z|25.71%|18.51%|3.87%|
- 75 -

percentage points range around the base case for private<sup>rates, and a 3</sup> percentage point range around the base case for social<sup>rates. The</sup> essential conclusion remains the same, however:<sup>investment in vocational</sup> and technical education is very attractive from<sup>the individual's</sup> point of view, and the calculated rates of return clearly<sup>explain why there is a</sup> demand for VTE in Cote d'Ivoire well in excess of<sup>the governments</sup> entrance quotas into the schools and institutes. When this<sup>is juxtaposed to a ilear</sup> excess supply of VTE graduates in the labor market-as<sup>indicated by the</sup> large percentage of unemployment among them-it becomes obvious that there are inflexibilities in the labor market that have prevented a downward adjustment of wages received by VTE graduates. It appears<sup>that the</sup> adjustment to the recession has mainly been through<sup>a reduction of the</sup> quantity of employment, while maintaining high salary levels for those still employed. The large presence of the public sector<sup>in wage employment</sup> is undoubtedly a major factor in this.

In contrast to formal VTE, the returns to informal VTE,<sup>i.e., to</sup> apprenticeships, are very low. To the extent that we may have overestimated the opportunity cost of apprentices (see above), we are inclined to accept the upper bound of the range as the most<sup>correct</sup> estimate of the rate of return, but that is still<sup>a mere 4Z. Since many</sup> apprenticeship graduates find employment in the informal sector where<sup>there</sup> are fewer wage rigidities, the low returns reflect the effects of the recession and the competing supply of labor from formal<sup>VTE graduates</sup> looking for jobs.
- 76 -

An important result is that, from society's point of view, the returns to different types and levels of VTE are essentially the same (the differences in calculated rates fall well within the margins of error of the calculations), and all are below the social opportunity cost of capital. To justify the investments in VTE thus requires the invocation of non-quantifiable benefits, such as general externalities from having a pool of vocationally and technically trained manpower available. Nevertheless, the low social rates of return and our analysis of the composition of institutional costs both point at the need to make the VTE system in C8te d'Ivoire more cost-effective. The continued substitution of expatriate teachers by Ivorians will contribute to that. The current scholarship policy should be scrutinized: in teacher and post-secondary VTE, scholarships per student are very generous and in view of the high private rates of return, such levels could easily be reduced without risk that the supply of students would dry up. For the post-secondary level, as well as for selected secondary institutes, the cost analysis revealed the large contribution to costs made by amortization of buildings and equipment. The elimination of expensive new construction, in favor of a fuller utilization, and perhaps upgrading, of existing facilities would enhance society's returns to its investment in VTE.

On a more general level, it i,: obvious that the labor market is not providing prospective VTE students with proper signals. A careful policy to introduce more flexibility into the market clearing mechanisms, in combination with a raising of private VTE costs, would contribute to
- 77 -

balancing supply of VTE graduates and demand for them.<sup>22</sup> / Clearly, such a policy extends beyond the scope of the VTE system as such and must be coordinated with overall employment, migration, and educational policies.

# 7.5 Earnings Analysis for the Self-Employed

Given that wage earners are only a small fraction of the informal labor market, we have also estimated the earnings function for the self-employed, who make up the bulk of the informal sector. A special caution is needed though given that the net earnings of the self-employed reflect not only the returns to human capital but to other inputs as well. This is obvious from the R<sup>2</sup> in Table 26, which indicate that human capital ani the included demographic and location variables explain only 15% of the variance in the net earnings of the non-farming self-employed and 31 of that of farmers' earnings. 23/ Of interest is that primary education contributes significantly to enhancing earnings of farmers. This suggests that people's perception of the irrelevance of the primary curriculum for work in rural areas (as reflected in falling enrollment rates) may not be entirely accurate, at least for farming occupations. For non-farming own account work, however, primary education does not enhance earnings. Rather, secondary education

- 22/ The raising of private costs is especially appropriate if it is determined that most of the current unemployment among VTE graduates in C8te d'Ivoire is structural. If, on the other hand, it contains a large cyclical component, care has to be exercised to avoid creating a shortage of graduates when the Ivorian economy picks up again.

- 23/ The diploma variables were not included because of their low incidence among the self-employed.
c

# Table 26: EARNINGS FUNCTION FOR THE SELF-EMPLOYED

||Farm|ers||Non|-Farmers||||||
|---|---|---|---|---|---|---|---|---|---|---|
||||Al|l|Abid|jan|Other C|ities|Rural|Areas|
|Intercept|8.78|(52.5)|10.36|(55.7)|10.62|(33.3)|10.52|(34.3)|10.09|(31.4)|
|Years of Primary Schooling|.055|(2.3)|<br>.014|(0.5)|<br>.012|(0.3)|<br>.020|(0.4)|<br>.057|(1.0)|
|Years of Secondary Schooling|.069|(0.6)|<br>.133|(1.8)|<br>.209|(2.3)|-.004|(0.0)|<br>.016|(0.1)|
|Years of Higher Schooling|-|-|.337|(1.4)|<br>.216|(0.9)|<br>_<br>-||-_||
|Years of Current Job Experience<br>|.0 8|(4.5)|<br>.036|(2.3)|<br>.059|(1.9)|<br>.019|(0.7)|<br>.079|(2.5)|
|(Years of Current Job Experience)<sup>2</sup>|-.0005|<br>(4.4)|<br>-.0006|(1.5)|<br>-.0015|<br>(1.6)|<br>.0001|<br>(0.1)|-.0024|(2.6)|
|Years of Previous Job Experience<br>|.041|(2.1)|<br>.090|(3.8)|<br>.062|(1.3)|<br>.112|(2.9)|<br>.031|(0.6)|
|(Years of Previous Job Experience)<sup>2</sup>|-.0009|<br>(1.5)|<br>-.0024|(2.9)|<br>-.0007|<br>(0.3)|-.0033|<br>(2.7)|-.0009|(0.5)|
|Years of Apprenticeship|-.043|(1.8)|<br>-.036|(1.0)|<br>-.024|(0.5)|-.096|(1.5)|<br>.011|(0.2)|
|Years of VTE|.195|(1.7)|.0005|(0.0)|<br>.019|(0.1)|-.026|(0.1)|<br>.281|(0.4)|
|Sex (1-female)|-1.63|(21.5)|<br>-.406|(2.7)|<br>-.351|(1.4)|-.553|(2.1)|-.512|(1.9)|
|Non-Ivorian|.240|(2.1)|-.033|(0.3)|<br>-.356|(1.9)|<br>.017|(0.1)|<br>.348|(1.4)|
|Abidjan|-1.17|(1.6)|.272|(2.1)|<br>_-|||-|-||
|Rural Areas|-.056|(0.5)|<br>-.132|(1.0)|<br>_-||-|_|-||
|R2|.31||.15||.25||.11||.15||
|F|47.4||6.9||5.0||2.6||2.2||
|Number of cases|1,286||530||180||211||139||

Note: Absolute t - values in parentheses.
- 79 -

appears to be the prime determinant among the human capital variables in Abidjan, and job experience in the other locations. It is remarkable that general education has a positive effect on the earnings of the self-employed, while informal VTE does not. The latter is presumed to be very practically oriented, but it either has no significant effect on earnings, or even a negative one in the case of farmers.24/ Formal VTE, however, mostly at the secondary level, does enhance farmers' earnings considerably, but it has no effect on the earnings of non-farmers.

Work experience plays an important role for all self-employed, but it is noteworthy that the impact of experience gathered in a previous occupation is more important than years in the current job. For example, five years of farming experience increases earnings by 18%, but those farmers who also had five years of experience in another job earn 20% more. The respective figures for non-farmers are 16.5% and 39%. (This effect of previous job experience is limited, though, to urban areas.) The findings about the role of human capital for the earnings of the self-employed should be treated with caution. A more complete analysis is needed which explicitly considers other inputs such as machinery and equipment, raw materials, land and buildings, and the use of family and hired labor. All this can be better integrated through a production function approach rather than through earnings functions (see e.g., Jamison

- 24/ This may be the result of negative selection, for example, if it is the least able farmers who take apprenticeships instead of other forms of education, or if the apprenticeship was in a non-farming trade but the graduate was unable to find work in that trade and became a farmer (or returned to farming).
- 80 -

and Lau, 1982). Such work is outside the scope of this paper. Also, the selection issue needs to be explicitly considered, as we did above for the employees' earnings function.

# 7.6 Summary of Main Findings

The private rates of return to a formal vocRtional and technical education are very high in C8te d'Ivoire: 15% for secondary level VTE and for teacher training, and 21% for post-secondary VTE. By contrast, the return to an apprenticeship training is below 4%. The high returns to formal VTE are the results of generous scholarships and an inefficiently functioning labor market where salaries do not respond downward to the existing excess supply of VTE graduates.

The social rates of return to vocational and technical education are around 4%, with no significant differences by type and level of VTE. These low rates, which are likely to be below the social opportunity cost of capital, are a result of high institutional costs stemming mainly from expensive school construction programs and the use of highly paid expatriate teachers, and of the current underutilization of facilities.

There in strong evidence of credentialism in the Ivorian labor market. General education diplomas and formal VTE diplomas ire the most important factors to gain entrance to wage employment.
- 81 -

Once such access has been gained, diplomas are less important in determining earnings than years of schooling and work experience (except for post-secondary VTE, where diploma is'also the main determinant of earnings). On average, a year of secondary or higher general education increases earnings by 13%, which is more than the effect from a year of work experience (8% for experience in the current job, 4% for experience in a previous job). A year of secondary VTE enhances earnings by 6.4%, a year of teacher training by 9%. The completion of a post-secondary VTE curriculum, with diploma, carries an earnings premium of 63%. Informal VTE is an inferior substitute for formal VTE as it does not promote entrance to wage employment and its effect on earnings is small.

For non-agricultural self-employed workers, general education was found to have a bigger impact on earnings titan VTE. For farmers, secondary level formal VTE greatly enhances earnings.

Policy action in the VTE system should focus on the reduction of scholarships, which, in view of the high private returns to formal VTE, should not endanger a sufficient supply of students. The ongoing replacement of expatriate teachers by Ivorians will also contribute to reducing institutional costs. Construction programs especially for post-secondary facilities should be carefully scrutinized, and, in general, the focus should be on more efficient utilization of existing VTE institutes. In coordination with other economic policies, actions to make the labor market more flexible and responsive to changes in supply and demand would contribute to sending the proper economic signals to prospective VTE students, thus making the VTE system more responsive to changing labor market conditions.
- 82 -

# 8. The Regional Dimension

The previous section presented an economic assessment of VTE at the national level. This level is relevant because many budget, investment, and other policy decisions are made for the country as a whole. Nevertheless, the CMte d'Ivoire is a far from homogeneous country. As some of the tables earlier in this paper indicated, there are wide divergences in education and earning levels between Abidjan, the other cities, and the rural areas. In this section we therefore Introduce a regional dimersion into the economic assessment of VTE.

The limitation of the CILSS data set, especially the small sample size, do. however, impose two restrictions on the regional analysis. First, only two levels of formal ITE can be distinguished: secondary level VTE and other VTE (combining post-secondary VTE and teacher training). Second, the number of cases of wage-earners in rural areas is too small and the estimated earnings function coefficients too imprecise to serve as a basis for an internal rate of return calculation. The latter is thus only presented for Abidjan and other cities. At any rate, given the prevalence of own account work in rural areas, the estimation of the returns to education should mainly be based on the earnings of the self-employed, and, as we said in section 7.5, the study of the role of education in own account work should follow a production function approach. This is outside the scope of this paper.
- 83 -

# 8.1 Earnings Analysis

Table 27 shows the means and standard deviations of the variables used in the regional earnings functions. The estimated functions in Table 28 reveal that there are similarities as well as important differences in the structure of rewards to human capital across locations. The similarities pertain mainly to years of general education and years of work experience, while the main differences have to do with years of VTE and the role of diplomas.

The insignificance of years of primary schooling as a determinant of wage-earnings is observed in every location. The contributions from a year of secondary and higher schooling are in the 12%-15% range in all iocations. In urban areas, both years of current and previous job experience are important determinants of wage-earnings. In Abidjan, a year of current job experience adds '0% to earnings, against 7% in other cities, but the earnings-experience profile peaks much sooner in Abidjan. A year of previous job experience adds 8% to earnings in Abidjan as well as in other cities.

The effect of VTE on earnings differ a great deal across locations. Secondary VTE adds 7.3% to earnings per year of education in Abidjan, but no additional premium is received for diplomas. In the other cities equation, the coefficient of years of secondary VTE is not significantly different from zero, but the corresponding diploma variable
- 84 -

# Table 27: MEANS AND STANDARD DEVIATIONS OF REGIONAL EARNINGS FUNCTION VARIABLES

||Abid|jan|Other|Cities|Rural|Areas|
|---|---|---|---|---|---|---|
||Mean|SD|Mean|SD|Mean|SD|
|ln(W2)|11.40|1.04|11.33|1.10|<br>10.41|1.35|
|Years of Primary Schooling|4.38|<br>2.59|<br>4.41|<br>2.61|<br>3.00|2.91|
|Years of Secondary Schooling|<br>2.49|<br>2.71|<br>2.43|<br>2.75|<br>1.18|2.05|
|Years of Higher Schooling|0.60|<br>1.73|<br>0.23|<br>0.94|<br>0.00|0.00|
|Years of Work Experience-|9.22|7.93|<br>9.69|8.03|<br>7.36|7.29|
|Current Occupation|||||||
|Years of Work Experience-<br>|1.44|3.19|<br>1.49|3.46|<br>1.99|4.54|
|Previous Occupation|||||||
|Years of Secondary VTE|1.02|<br>1.85|<br>0.79|<br>1.27|<br>0.22|<br>1.16|
|Years of Other VTE|0.15|0.60|<br>0.27|0.80|<br>0.22|0.57|
|Years of Apprenticesh5p|0.79|<br>1.85|<br>0.67|<br>1.73|<br>0.41|<br>1.49|
|Training|||||||
|CEPE|0.21|<br>0.41|<br>0.24|0.43|<br>0.18|0.39|
|BEPC|0.03|0.16|<br>0.07|0.26|<br>0.06|0.23|
|Secondary VTE Diploma|0.27|0.44|<br>0.21|0.41|<br>0.11|0.32|
|Other VTE Diploma|0.06|0.24|0.11|0.31|-|-|
|Other Diploma|0.09|0.28|<br>nn.0|0.22|<br>0.02|0.14|
|Sex (1-<br>female)|0.21|0.41|<br>0.18|0.39|<br>0.07|0.26|
|Non-Ivorian|0.16|0.37|<br>0.14|0.34|<br>0.30|0.46|
|Seasonal Job|0.00|0.00|<br>0.03|0.17|<br>0.18|0.39|
|Number of Cases|270|-|176|<br>-|54|-|
- 85 -

# Table 28: EARNINGS FUNCTIONS, BY LOCATION

||Abi|djan|Other|Cities|Rural A|reas|
|---|---|---|---|---|---|---|
|Intercept|10.17|(72.2)|9.99|(28.1)|9.45|(22.0)|
|Years of Primary Schooling|.027|(0.9)|<br>.005|<br>(0.1)|<br>.069|<br>(0.7)|
|Years of Secondary Schooling|.124|(4.0)|<br>.149|<br>(4.0)<br>|<br>.156<br>1|<br>(0.9)|
|Years of Higher Schooling|.129|(2.3)|<br>.120|<br>(1.7)|||
|Years of Current Job Experience<br>|.099|(6.1)|<br>.069|<br>(3.2)|<br>.153|(1.8)|
|(Years of Current Job Experience)<br>2|-.0019|<br>(3.5)|-.0008|<br>(1.1)|-.0054|<br>(1.5)|
|Years of Previous Job Experience<br>|.082|(2.2)|<br>.078|<br>(2.1)|<br>.037|<br>(0.4)|
|(Years of Previous Job Experience)<br>2|-.0054|<br>(1.8)|-.0043|<br>(1.7)|<br>.0016|(0.3)|
|Years of Apprenticeship|.014|(0.6)|-.001|(0.0)|<br>.169|<br>(1.3)|
|Years of Secondary VTE|.073|(2.1)|<br>.037|<br>(0.5)|<br>.025|<br>(0.2)|
|Years of Other VTE|.052|(0.4)|<br>.037|<br>(0.4)|<br>.463|<br>(0.8)|
|CEPE|-.098|(0.5)|<br>.573|<br>(2.0)|<br>.254|<br>(0.4)|
|BEPC|-.324|(1.0)|<br>.483|<br>(1.3)|<br>.038|<br>(0.0)|
|Secondary VTE Diploma|.023|(0.1)|<br>.736|<br>(2.1)|-. 199|(0.2)|
|Other VTE Diploma|.650|(1.6)|<br>.711|<br>(1.7)|||
|Other Diploma|.344|(0.9)|<br>.666|<br>(1.7)|<br>-|_|
|Sex (1-female)|-.064|(0.6)|-.201|(1.1)|<br>.346|<br>(0.6)|
|Non-lvorian|-.074|(0.6)|-.206|(1.2)|-.546|(1.3)|
|Seasonal Job|-|_|.064|<br>(0.2)|-.923|(2.4)|
|Lambda|-.275|(2.3)|-.120|(0.6)|<br>-|_|
|R<sup>2</sup>|.5|8|.|63|.|59|
|F|19.|13|14.|12|3.|66|

# Note: Absolute t - values in parentheses.
- 86 -

has a large positive coefficient. This suggests that in other cities, only completed secondary level VTE is rewarded in the labor market. For post-secondary and teacher VTE, we find that in all urban locations completed training with a diploma adds 65% to 71% to earnings.

Credentialism in earnings thus appears to be stronger for VTE graduates than for graduates with only general education, and is most evident in cities other than Abidjan. The sectoral analysis in section 9 will pursue this point further.

Apprenticeships do not significantly enhance wage-earnings in urban areas, confirming that it is a generally inferior form of training which does not prepare people properly for wage work. In rural areas, however, a year of apprenticeship adds about 17% to earnings (the t-value indicates that this estimate is not very precise though), which is more than other education and work experience (with the exception of post-secondary VTE). Clearly, in rural reas, where the numbers of formal VTE graduates is small, apprenticeships offer a relatively more valuable training. They may also be more directly geared towards the (limited range of) jobs which apprenticeship graduates take up.

With respect to the demographic variables, we find that, as was the case in the countrywide equation, there is no evidence of a wage-gap between the sexes in any locatIon, once selection into wage-employment has been taken into account. The role of ethnicity is not so clear. In the countrywide equation, a significant negative wage gap was found for
- 87 -

non-Ivorians. The location-specific equations suggest that this may be mostly due to rural areas, but the estimation results are too imprecise to be conclusive.

The earnings equations for Abidjan and other cities in Table 28 were corrected for selection bias using the procedure described in section 7.1. The earnings equation for rural areas was estimated without the correction because the number of cases was too small to successfully implement che procedure. The coefficients of lambda suggest that negative selection into wage employment occurs most strongly in Abidjan. This is consistent with the interpretation of the negative sign we offered in section 7.1, namely that barriers to entry may exist into wage-employment. Indeed, in Abidjan, there is a relatively stronger presence of the government in the labor market, and access to government jobs is restricted the most.

# 8.2 Access to Wage-Employment

One of the main findings of the employment status choice equation for C^te d'Ivoire as a whole was that VTE is a major determinant of access to wage-employment, particularly if a diploma was obtained. The regional equations (Table 29) confirm that VTE promotes access to wage-employment in other cities and rural areas. The results in Abidjan are not conclusive. The role of diplomas in job access could not be studied at the regional level because the splitting of the data did not leave sufficient cases for precise estimation.
- 88 -

# able 29: CHOICE OF EMPLOYMENT STATUS - PROBIT RESULTS, BY LOCATION

||Abi|djan|Other|Cities|Rural A|reas|
|---|---|---|---|---|---|---|
|Intercept|-1.117|(0.9)|-3.98|(6.8)|<br>-3.97|(8.3)|
|Years of Primary Education|.038|(0.6)|<br>.104|(2.8)|<br>.036|<br>(0.9)|
|Years of Secondary Education|-.063|(0.8)|<br>.079|(1.4)|<br>.644<br>|<br>(12.8)|
|Years of Higher Education|.420|(1.8)|<br>.576|(1.3)|<br>1||
|Years of Secondary VTE|.146|(1.1)<br>|<br>320<br>|(3.8)|<br>1.08|(21.3)|
|Years of Other VTE|-.397|(0.8)|1||||
|Years of Apprenticeship|-.073|(1.6)|<br>-.011|(0.3)|<br>-.186|(2.7)|
|CEPE|.261|(0.6)|<br>.116|(0.5)|<br>-1.57|(6.2)|
|BEPC|.239|(0.3)|<br>.332|(0.8)|<br>-|_|
|Secondary VTE Diploma|.019|(0.1)|<br>- 1/|<br>-|-|-|
|Other VTE Diploma|.814|(0.6)|<br>- T/|<br>-|_|_|
|Other Diploma|-1.07|(1.1)|<br>- D|-|-|-|
|Age|.208|(3.1)|<br>.181|(5.3)|<br>.106|<br>(3.7)|
|(Age)<sup>2</sup>|-.0029|<br>(3.4)|<br>-.0023|<br>(4.9)|<br>-.0013|<br>(3.4)|
|Female without Child < 5 Years|-1.28|(4.5)|<br>-.650|(2.3)|<br>-1.07|(5.1)|
|Female with Chill < 5 years|-1.65|(6.5)|<br>-.866|(5.4)||(|
|Non-Ivorian|-1.07|(5.0)|<br>-.011|(0.1)|<br>.835|<br>(4.5)|
|Years of Resiuence Since Migration<br>|-.036|(1.3)|<br>.038|(1.7)|<br>.065|<br>(2.4)|
|(Years of Residence Since Migration)<br>2|.0012|<br>(1.6)|-.0015|<br>(1.9)|<br>-.0027|<br>(2.3)|
|Household Enterprises|-1.33|(9.4)|<br>-.185|(2.9)|<br>-.424|(3.5)|
|Log-<br>likelihood|-132.|84|-236|.57|-3|06.28|
|Chi-<br>squared|376.|52|343|.06||_|
|Significance Level|.1E-|6|.1E|-6||_|
|Z Correct Predictions|89||8|8||98|

Note: Coefficients pertain to the likelihood to become a wage-earner. Absolute asymptotic t-values in parentheses.

1/ Not included for collinearity reasons.

2/ Included in BEPC.
- 89 -

The location-specific equations do, however, bring out strongly the role of demographic characteristics in job access. Women are much less likely to obtain wage-work t%an men, especially in Abidjan. The additional negative effect from the presence of small children in the household is also largest in Abidjan. Nationality is a relevant factor in Abidjan and in rural areas, but not In the same direction. In Abidjan, non-Ivorians are less likely to obtain wage jobs, no doubt because public sector jobs are typically not accessible to them. In rural areas, on the other hand, non-Ivorians are more likely to become wage-earners. Many non-Ivorians in rural areas work as farm workers because they lack the land and capital to set up their own farm or other household enterprise.

The role of migrant status is of particular interest as it indicates quite different patterns whereby migrants enter different labor markets. In Abidjan, the probability to obtain wage-employment decreases with length of residence until 15 years. This suggests two kinds of entrants into wage-jobs: recent migrants, probably young and well educated, who fairly quickly find wage-employment, and older workers who go through a lengthy period of own account work before switching to wage-rork. In other cities and rural areas, the reverse situation is observed: the probability to obtain wage-work rises with years of residence, up to 12 years (for a further discussion of the link between migration and acceis to different types of employment in C8te d'Ivoire, see Grootaert, 1987).
- 90 -

# 8.3 Coass and Rates of Return

The locational breakdown of private costs of VTE shows major differences between Abidjan and other cities (Table 30). Not surprisingly, out-of-pocket costs are the highest in Abidjan. Opportunity costs, however, are higher in other cities, especially for post-secondary and teacher training. The reason for this is that years as well as diplomas of secondary general education and VTE have much higher returns associated with them in other cities than in Abidjan (see the regional earnings functions in Table 28). The earnings foregone as a result of proceeding with one's education past -he secondary level are thus more elevated in other cities. As a result total annual private costs of post-secondary and teacher training in other cities are 2.3 times those in Abidjan. The total private costs of a year of secondary VTE and those of a year of apprenticeship, however, are in the same order of magnitude in Abidjan and other cities.

It was not possible from the available data to compute institutional costs separately for each location, and the small differences in social costs between locations in Table 31 merely reflect differences in tuition payments.

Table 31 also shows that the salary increments due to VTE are much higher in other cities than in Abidjan. This again is a result of the high coefficients estimated in the other cities earnings equation for VTE
- 91 -

Table 30: ANNUAL PRIVATE COSTS OF VTE (PER STUDENT). BY LOCATION (CFAF)

||Seconda|ry Level|Post Se<br>an<br>Teacher|condary<br>d<br>Training|Apprenticeships|
|---|---|---|---|---|---|
|||-<br>-|~~<br>Abid|jan||
|Out-Of-Pocket<br>Costs<br>Scholarships|190,149<br>31,308|<br>|259,902<br>96,432|||
|<br>Net Out-Of-Pocket<br>Costs|<br>158,841|<br>(29.1%)|<br>163,470|(25.0%)|<br>-|
|Opportunity<br>Costs|<br>387,720|<br>(70.9%)|<br> <br> <br>491,388|<br>(75.0%)|<br>384,396 (100.0%)|
|<br>Total Private Costs|546,561|(100.0%)|<br>654,858|(100.0%)|384,396 (100.0%)|
||||Other|Cities||
|Out-Of-Pocket<br>Costs|103,935||80,374|||
|Scholarships|<br>5,824|<br>|55,632|||
|<br>Net Out-Of-Pocket<br>Costs|<br>98,112|<br>(16.8%)|<br>24,742|(1.6%)|<br>-|
|Opportunity<br>Costs|<br>485,256|<br>(83.2%)|<br> <br>1,495,24|<br>8 (98.4%)|<br>301,320 (100.0%)|
|<br>Total Private Costs|583,368|(100.0%)|1,519,99|0 (100.0%)|301,320 (100.0%)|
- 92 -

# Table 31: BENEFIT AND COST STREAMS FOR VTE GRADUATES, BY LOCATION (CFAF)

||Secondary<br>Level|Post Secondary<br>Teacher Training|J<br>Apprent|iceships|
|---|---|---|---|---|
|Benefits||Abidjan|||
|Starting<br>Salary Increment<br>Final Salary Increment<br>Duration<br>of Benefit<br>Stream (Years)|119,929<br>363,721<br> <br>35|599,784<br>1,680,574<br>34.5|22,799<br>69,144<br>35||
|Costs 1/|||||
|Private Costs<br>Social Costs<br>Duration<br>of Cost Stream (Years)|546,561 (100)<br>2,207,063 (404)<br>2.79|<br>654,858 (100)<br>3,985,340 (608)<br>3.15|<br>384,39<br> <br>384,39<br>3|6 (100)<br>6 (100)<br>.05|
|||Other Cities|||
|Benefits|||||
|Starting<br>Salary Increment<br>Final Salary Increment<br>Duration<br>of Benefit Stream (Years|926,030<br>3,852,870<br>)<br>35|3,483,595<br>14,804,976<br>34.5|0<br>0<br>35||
|Costs1_|||||
|Private Costs<br>Social Costs<br>Duration<br>of Cost Stream (Years)|583,368 (100)<br>2,260,957 (388)<br>2.79|1,519,990 (100)<br>4,079,978 (268)<br>3.15|<br>301,32<br> <br>301,32<br>3|0 (100)<br>0 (100)<br>.05|

# 1/ Index in parentheses.
- 93 -

diplomas (the increments are calculated assuming a person completed a given curriculum and obtained the concomitant diploma). This in turn reflects the greater tightness of the labor market in other cities and the strong tendency of VTE graduates to migrate to Abidjan. Nevertheless, we feel that some of the increments, especially the final ones, are unrealistically high. There is indeed a danger in extrapolating, especially from a small sample, beyond the range over which estimation was done. The final salary increments represent those earned by people with 35 years of experience. The sample, however, contained very few such cases. As Table 27 showed, the mean of work experience is about nine years, and only for about 5% of the observations did experience exceed 25 years. The projected salary increments may as a result have an upward bias.

The internal rates of return by location are given in Table 32. At the secondary level, the rates for Abidjan are slightly below those we calculated for Cbte d'Ivoire as a whole. The rates in other cities, however, are much higher; in fact, the social internal rate of return of secondary VTE in other cities exceeds the private rate in Abidjan. Given our earlier caution regarding the projections of salary increments, we are inclined to consider the rates for other cities as upper bounds for the true internal rate of return.

The rates of return for post-secondary and teacher training are higher than those for secondary VTE in Abidjan as well as in other cities--as we also found for the country as a whole. The rates in other
- 94 -

# Table 32: INTERNAL RATES OF RETURN FOR VTE, BY LOCATION

||Secondary Level|Post Secondary<br>and<br>Teacher<br>Training|Apprenticeships|
|---|---|---|---|
|||AbidJan||
|Social Rate of Return||||
|Base Case<br>Costs+25X<br>Costs-<br>25%|3.19Z<br>2.01%<br>4.83%|8.53%<br>6.98%<br>10.76%|3.00X<br>1.85%<br>4.60X|
|Private Rate of Return||||
|Base Case<br>Costs+25%<br>Costs-<br>25%|13.19%<br>11.15%<br>16.19%|30.04%<br>26.04%<br>36.05%|3.00%<br>1.85Z<br>4.60X|
|||Other Cities||
|Social Rate of Return||||
|Base Case|18.83%|27.03%|_|
|Costs+25%|16.11%|23.30%|_|
|Costs-<br>25%|22.97%|32.69%|_|
|Privat6 Rate of Return||||
|Base Case|47.75%|51.34%|_|
|Costs+25%|41.05%|44.56%|_|
|Costs-<br>25%|57.87%|61.37%|_|
- 95 -

cities are also systematically higher than in Abidjan, but the same caution as for secondary VTE applies here.

The returns to apprenticeships in Abidjan are slightly higher than we found for the country as a whole. We did not calculate the internal rate of return for other cities because the coefficient of years of apprenticeship is equal to zero in the earnings function (see Table 28).

The regional breakdown of the internal rate of retur - 'culation has confirmed the wide gap between private and social returns to v_ in C8te d'Ivoire. It has also revealed that returns to formal VTE are much higher in other cities than in Abidjan, to the extent that the social ratof return in other cities is well aLove the opportunity cost of capital. Even allowing for the earlier mentioned difficulty of extrapolating life time salary increments, the magnitude of the difference is such that the qualitative finding of higher returns in other cities appears robust.

In addition to the policy suggestions mentioned in the previous section, regarding the need to reduce institutional costs and to enhance the efficiency of the labor market, the returns to C8te d'Ivoire's investment in VTE could be enhanced if more graduates of the VTE system would obtain jobs in other cities instead of in Abidjan. Our findings support the ongoing effcrts of the government of C8te d'Ivoire to stem the migration flow to Abidjan and to develop several in-land cities as secondary growth poles.
- 96 -

It is useful to emphasize that our results do not support moving the VTE institutions themselves to other cities. Since we were unable to differentiate institutional costs regionally, we do not know whether these costs vould be less in other cities than in Abidjan. Two elements make this doubtful, however: first, VTE teachers are government employees and government payscales are not regionally differentiated (apart from a relatively minor location allowance), and, second, the main post-secondary VTE institute in C8te d'Ivoire (INSET) is located in an in-land city and as our detached cost tables (see appendix 3) show, it is a very high cost institute. Thus, our findings support incentive systems and employment promotions ro provide jobs for VTE graduates in other cities, regardless of the location of institutes.

# 8.4 Summary of Main Findings

The role of human capital irt determining access to employment, %s well as the returns to investment in human capital are significantly different in different locations of Cbte d'Ivoire.

Formal VTE at the secondary level is rewarded according to the years of education in Abidjan, but in other cities only completed curricula capped with a diploma have a significant and large effect on earnings. For post-secondary and teacher VWE, diplomas are the main determinant of earnings in both Abidjan and other cities. In general, credentialism in earnings appears to be stronger for VTE graduates than for graduates with only general education.
- 97 -

Apprenticeships have insignificant returns in urban areas, implying that they are not substitutes for formal VTE, at least as far as wage-work is concerned. In rural areas, on the other hand, apprenticeships have similar or larger effects on earnings than other types of human capital.

Both the private and social internal rates of return to VTE are systematically Sigher in other cities than in Abidjan. Policies to stem the tide of migration into Abidjan and promote employment creation in other cities can thus also contribute to enhancing the returns of C8te d'Ivoire's investment in VTE.
- 98 -

# 9. The Sectoral Dimeasion

The market fer wage-l ,V - in C8te d'Ivoire consists of three maln sectors: the public sector (Cete overnment and publicly owned enterprises), the formal private sector, and the informal private sector. In this section, we address the questions whether the contribution to earnings made by human capital is different across these sectors, and how formal and informal VTE affects access to these sectors.

The earnings functions for each type of employee are shown in Table 33 and the access functions in Table 34. The assumptio6 underlying these functions is that selection into a sector of employment is a sequential process consisting of three decisions: (1) the choice of wage employment vs. own account work; (2) given that wage employment was selected, the choice of the public vs. the private sector; and (3) if the private sector was chosen, the final decision is between the formal and the informal sector. The earnings functions have been estimated with the two-step method explained in section 7.1, and the coefficients are thus corrected for possible non-random selection at each level of the decision chain.

A first noteworthy result is that a far larger part of the variance of government wages is explained by the variables in the regression than is the case for wages in other sectors. Since all of these variables are easy "observables," it implies that private sector wages
Table 33: EARNINGS FUNCTIONS (lnW2) BY TYPE O EMPLOYEE

||Public|Sector|Private|Sector|Priv<br>Formal|ate<br>Sector|Priv<br>Informal|ate<br>Sector|
|---|---|---|---|---|---|---|---|---|
|Intercept|10.37|(55.1)|9.48|(46.8)|10.44|(30.9)|9.41|(27.4)|
|Years of Primary Schooling|.095|(2.3)|<br>.059|(1.7)|<br>.022|(0.6)|-.014|<br>(0.1)|
|Years of Secondary Schooling|.142|(6.4)|<br>.109|(3.0)|<br>.074|(1.9)|<br>.007|<br>(0.1)|
|Years of Higher Schooling|.082|(2.6)|<br>.196|(1.8)|<br>.261|(2.8)|||
|Years of Current Job Experience<br>|.047|(3.2)|<br>.084|(4.3)|<br>.102|(4.4)|-.049|<br>(1.3)|
|(Years of Current Job Experience)<br>2|-.C05|(0.9)|-.0018|<br>(2.7)|-.0023|<br>(3.1)|<br>.0010|(1.0)|
|Years of Previous Job Experience|.067|(2.9)|<br>.002|(0.0)|-.011|(0.3)|-.073|<br>(0.7)|
|(Years of Previous Job Experience)<br>2|-.0038|<br>(2.4)|<br>.001|(0.6)|<br>.0006|(0.3'|<br>.016|(1.8)|
|Years of Apprenticeship|.013|(0.3)|<br>.053|(1.8)|<br>.039|(1.3)|<br>.107|(2.3)|
|Years of Secondary<br>VTE|-.021|(0.8)|<br>.139|j<br>1)|<br>.142|(3.3)|||
|Years of Post-Secondary<br>VTE|.079|(0.8)|-.480|<br>(,.6)|<br>.012|(0.1)|<br>.104|(0.6)|
|Years of Teacher Training|.016|(0.2)|-.712|(1.4)|1||_||
|CEPE|.082|(0.3)|-.153|(0.7)|-.031|(0.1)|-.056|<br>(0.1)|
|BEPC|-.139|(0.4)|-.354|(0.9)|<br>.095|(0.3)|1.08(|*) (1.0)|
|Secondary<br>VTE Diploma|.082|(0.3)|-.253|(0.8)|<br>.033|(0.1)|||
|Post-Secondary<br>VTE Diploma|.100|(0.3)|<br>.680|(1.1)|<br>.533|(1.0)|<br>.244|(0.3)|
|Teacher Diploma|.081|(0.3)|<br>.211|(0.3)|1||||
|Other Diploma|.003|(0.0)|<br>.025|(0.1)|<br>.377|(0.8)|<br>-|_|
|Sex (1-female)|-.444|(4.9)|-.255|(1.7)|-.116|(0.7)|-.027|<br>(0.1)|
|Non-Ivorian|-.296|(0.6)|<br>.159|(0.9)|-.361|(2.7)|-.027|<br>(0.1)|
|Seasonal Job|-|_|-.617|(2.5)|<br>-.232|(0.3)|<br>-.119|(0.4)|
|Abidjan|.183|(2.0)|<br>.279|(2.1)|-.039|(0.3)|<br>.029|(0.1)|
|Rural Areas|-.099|(0.7)|-.217|(1.2)|-.139|(0.6)|-.363|<br>(1.2)|
|Lambda|-.254|(1.8)|-.919|(4.4)|-.080|(0.3)|-.669|<br>(1.7)|
|R2|.70||.54||.50||.27||
|F|19.68||13.35||8.57||1.48||
|Number of cases|213||288||202||86||

Note: Absolu.te t - values in parentheses.

(*) Includes "other diploma"
100

-

-

Table 34: ACCESS FUNCTIONS (PROBIT RESULTS)

||Public|Sector|Priva<br> <br>Formal|te<br>Sector|
|---|---|---|---|---|
|Intercept|-5.647|<br>(5.8)|-6.157|(6.8)|
|Years of Primary Schooling|-.059|(0.9)|-.039|(0.4)|
|Years of Secondary Schooling<br>Years of Higher Schooling|-.066<br>.206|(1.4)<br> <br>(2.1)|<br>.088|(1.2)|
|Years of Secondary VTE|-.049|(0.9)|||
|Years of Post-Secondary<br>VTE|.648|<br>(2.1)|<br>.042|(0.4)|
|Years of Teacher Training|1.53|(2.9)|||
|Years of Apprenticeship|-.121|(2.3)|-.085|(2.2)|
|CEPE|.865|<br>(2.3)|<br>.269|(0.9)|
|BEPC|1.44|(2.8)|<br>.384(*|) (0.6)|
|Secondary VTE Diploma|1.56|(3.6)|||
|Post-Secondary<br>VTE Diploma|-.176|(0.2)|<br>.990|(1.9)|
|Teacher Diploma|.210|<br>(0.3)|||
|Other Diploma<br>Age<br>(Age)<sup>2</sup>|1.01<br>.261<br>-.0026|(1.7)<br> <br>(4.8)<br> <br>(3.8)|<br>_<br> <br>.289<br>-.0032|_<br>(5.5)<br>(4.5)|
|Female with Child <5 Years|.461|<br>(2.2)|<br>.253|(0.9)|
|Female without Child <5 Years|.578|<br>(2.0)|-.380|(0.9)|
|Non-Ivorian|-2.37|(4.9)|-.015|(0.1)|
|Years of Residence Since Migration<br>(Years of Residence Since Migration)<br>2|-.006<br>-.0005|(0.2)<br> <br>(0.8)|<br>.010<br> <br>.0003|(0.3)<br>(0.3)|
|Household Enterprises|-.233|(2.0)|-.005|(0.1)|
|Abidjan|-.585|(3.5)|<br>.364|(1.8)|
|Rural Areas|-.510|(1.9)|-.057|(0.2)|
|Log- likelihood<br>Chi- squared<br>Significance<br>Level<br>xCorrect Predictions<br>Sample|-2<br>3<br>.<br>All empl|19.30<br>60.85<br>1E-6<br>82<br>oyees|-157.<br>237.<br>.1E-<br>83<br>All priva<br>Sector<br>Employee|28<br>09<br>6<br>te<br>s|

Note: Absolute asymptotic t-value in parentheses.

(*) Includes "other diploma"
- 101 -

reflect more unobservables such as innate ability, entrepreneurshi , etc. that are not captured in the regression. This is, of course, exactly as one would anticipate, and is most apparent in the informal sector equation. Moreover, it appears that the government rewards general education by years and not by diploma. The lack of significance of years and diploma of VTE in the earnings equation is a result of the importance of VTE in gaining access to government jobs. Seniority increases are p-.'4 at a stLddy 5% per year, and pre-government work experience is also rewardea out at a rapidly declining rate.

An important result from the choice equation is that diplomas as well as years of schooling are determinants of the sector of employment. Especially years of higher general education, years of post-secondary VTE and years of teacher training significantly promote access to government jobs. The public sector thus absorbs the graduates of the very upper end of the education pyramid.

Demographic factors are also important determinants of access to the public sector: women are much more likely to select the public over the private sector, particularly if they have no infants in their household. However, female government workers earn on the average 44% less than their male colleagues. Both fac 8-a undoubtedly reflect a differing occupational mix between men and women: the government recruits many female secretarial and other support staff who are paid less than the predominantly male higher level civil servants.
- 102 -

In the private sector, rewards to general education rise sharply with level of education. Work experience is rewarded at twice the government's level, but only for experience in the current job, and at a declining rate. A year of secondary VTE adds 14% to earnings. The results for post-secondary and teacher VTE are estimated imprecisely because of the small number of cases involved. Each year of apprenticeship training adds 5% to earnings in the Private sector, and, moreover, such training is a significant determinant of access to the private sector.

Within the private sector, apprenticeship training makes it very likely that a person chooses work in the informal sector. The wage equations indicate that indeed the effect of apprenticeships on earnings is greatest in that sector: earnings increase 10.7% for each year of training vs. 3.1% in the formal sector. Formal VTE, on the other hand, predisposes a graduate to the formal sector where his/her training has the higher pay-off. In fact, the access function shows that, together with age, the type of VTE received is the most important variable which filters people into the formal or informal sector. This finding must be added to our earlier observation that the type of VTE is an important determinant of access to wag-. employment as such.

A final item worth noting is the signs of the coefficients of lambda in the various earnings regressions. They reveal negative selection into the public sector and positive selection into the private sector,
- 103 -

especially the informal labor market.<sup>25</sup> / This means that the private sector Is successful In attracting those individuals with 'unobserved' characteristics (ability, motivation, initiative, etc.) which tend to lead to high productivity and earnings. It is remarkable that the informal sector appears most successful at this, but Jt reflects perhaps well on the fact that this sector operates wlth the fewest rigidities and can respond most easily to supply and demand factors.

# Integrating the Regional and Sctoral Dimensions

The general conclusion of the previous sub-section Is that the role of general education and VTE in determining earnings and access to employment differs by type of employment considered. Since section 8 had demonstrated the Importance of the regional dimension as well, ideally, one would want to integrate the two dimensions. Unfortunately, the combination of three locations and three types of employment yields cells for which the CILSS provides only a small number of observations, and estimates of access and earnings equations become increasingly imprecise. Moreover, it becomes necessary to aggregate all types of formal VTE into one category. We therefore limit ourselves to presenting OLS estimates of the earnings equations for some of the combinatinas.. 3ne conclusions have, of course, a more tentative nature.

25/ Since the ptiblic/private sector choice equation in Table 34 was estimated with the private sector as base category ("zero"), the lambda's calculated for the private sector observations are negative. Rence the negative coefficient of lambda in the private sector earnings function indicaites positive selection into that sector. Similarly, the formal/informal sector choice equation used the informal sector as base category, so the negative coefficient of lambda in the informal sector earnings function indicates positive selection.
- 104 -

The earnings equations in Table 35 suggest that even within the public sector, human capital is not necessarily equally rewarded in different locations. For example, in Abidjan a year of higher schooling carries a 50X larger premium than in other cities. We expect, however, that some of the differences merely reflect the different make-up of the pool of applicants for government jobs in Abidjan and other cities, corresponding to different levels of jobs available.

Our earlier results for the private sector had indicated a reward structure mainly based on years of education and work experience. We now find that this is the case only in Abidjan. An other cities, diplomas and work experience are the main determinants of earnings. One reason for this might be the greater shortage of skilled staff in other cities, especially those with a completed curriculum, due to the pull of Abidjan. We already noted earlier (Table 14) that monthly earnings in the formal private sector are higher in other cities than in Abidjan. The difference can be considered an anti-migration premium, and the coefficients of the diploma variables reflect this.

The last set of earnings equations we show are those for the private formal sectors in Abidjan and other cities (Table 36). The number of observations in the informal sector was too small to permit a breakdown by location. In general, within each location, the coefficients parallel those for the private sector as a whole. We note, for example, that premiums paid to diploma holders in other cities is a formal sector phenomenon.
# Table 35: EARNINGS FUNCTIONS (lnW2) FOR GOVERNMENT AND PRIVATE SECTOR EMPLOYEES, BY LOCATION

|||Abidj|an|||Other|Cities||
|---|---|---|---|---|---|---|---|---|
||Gover|nment|Privat|e Sector|<br>Gover|nment|Privat|e Sector|
|Intercept|10.730|(49.7)|9.886|(53.2)|9.676|(46.7)|9.800|(29.5)|
|Years of Primary Schooling|.170|(2.3)|<br>.015|(0.4)|<br>.085|(0.9)|-.024|(0.3)|
|Years of Secondary Schooling|.165|(4.8)|<br>.113|(2.5)|<br>.180|(6.1)|<br>.043|(0.4)|
|Years of Higher Schooling|.126|(2.6)|<br>.356|(3.2)|<br>.085|(1.5)|<br>.101|(0.7)|
|Years of Current Job Experience<br>|.0068|(0.3)|<br>.141|(6.2)|<br>.074|(3.6)|<br>.079|(1.9)|
|(Years of Current Job Experience)<br>2|.0007|(0.8)|-.0031|<br>(4.2)|-.0008|<br>(1.3)|-.0022|<br>(1.4)|
|Years of Previous Job Experience<br>|.047|(1.0)|<br>.097|(1.7)|<br>.109|(3.0)|<br>.229|(1.5)|
|(Years of Previous Job Experience)<br>2|-.0042|<br>(1.1)|-.0074|<br>(1.6)|-.0054|<br>(2.5)|-.025|(1.6)|
|Years of Apprenticeship|-.007|(0.1)|<br>.023|(0.8)|<br>.030|(0.6)|-.001|(0.1)|
|Years of VTE|-.014|(0.4)|<br>.124|(2.5)|<br>.006|(0.1)|<br>.061|(0.5)|
|CEPE|-.804|(1.7)|-.014|(0.1)|<br>.427|(0.8)|<br>.582|(1.2)|
|BEPC|-.128|(2.4)|-.152|(0.3)|<br>.139|(0.2)|1.199|<br>(1.7)|
|VTE Diploma|-.478|(1.0)|<br>.029|(0.1)|<br>.295|(0.5)|2.119|<br>(2.8)|
|Other Diploma|-.928|(1.8)|-.066|(0.1)|<br>.078|(0.1)|2.364|<br>(2.7)|
|Sex (1-female)|-.431|(3.9)|-.0038|(0.1)|-.315|(2.5)|-.179|(0.5)|
|Non-Ivorian|_||-.202|(1.3)|-.571|(1.2)|<br>.019|<br>(0.1)|
|Seasonal Job|_|_-||_|-||.175|(0.3)|
|R2|.73||.49||.71||.65||
|F|15.8||9.9||13.8||6.8||
|n|98||172||100||76||

Note: Absolute t - values in parentheses.
- 106 -

# Table 36: EARNINGS FUNCTIONS (lnW2) FOR PRIVATE FORMAL SECTOR EMPLOYEES

# BY LOCATION

||Abidj<br>Forma|an<br>l|Other Ci<br>Forma|ties<br>l|
|---|---|---|---|---|
|Intercept|10.137|(45.4)|10.645|(23.2)|
|Years of Primary Schooling|.030|(0.7)|<br>-.151|(1.4)|
|Years of Secondary Schooling|.092|(2.3)|<br>-.016|(0.1)|
|Years of Higher Schooling|.395|(4.2)|<br>.187|(1.1)|
|Years of Current Job Experience<br>|.142|(6.0)|<br>.049|(0.8)|
|(Years of Current Job Experience)<br>2|-.0034|<br>(4.3)|<br>-.0023|<br>(0.9)|
|Years of Previous Job Experience<br>|.042|(0.8)|<br>.124|(0.7)|
|(Years of Previous Job Experience)<br>2|-.0043|<br>(1.0)|<br>-.017|(0.9)|
|Years of Apprenticeship|.055|(1.5)|<br>.004|(0.1)|
|Years of VTE|.125|(2.9)|<br>.169|(1.1)|
|CEPE|-.143|(0.6)|<br>.917|(1.3)|
|BEPC|.322|(0.6)|<br>1.717|(2.0)|
|VTE Diploma|-.176|(0.6)|<br>2.349|(2.5)|
|Other Diploma|-.272|(0.6)|<br>2.623|(2.7)|
|Sex (1-female)|-.022|(0.1)|<br>-.501|(1.1)|
|Non-Ivorian|-.302|(1.9)|<br>.171|(0.5)|
|R2|.52||.68||
|F|8.5||4.6||
|n|135||49||

# Absolute t - values in pa.entheses.
- 107 -

Sumary of Main FinAgs Human capital variables are important determinants of the type of wage employment people select. The reward structure to human capital also differs by type of employment as well as by location within each type.

Entrance to a public sector job in C8te d'Ivoire is promoted by obtaining diplomas, from general as well as vocational and technical curricula, but also by years of education, especially at the upper end of the education pyramid (higher general education, post-secondary and teacher VTE). Once the job is obtained, the earnings level is set according to the number of years of general schooling and work experience.

In the private sector, rewards to general education rise sharply with level of education. Work experience is rewarded higher than in government service. The type of VTE received is a major determinant of selection between the formal and informal private sector. Apprenticeship graduates tend to obtain work in the informal sector where each year of their training adds 10.72 to earnings. Graduates from secondary level formal VTE channel themselves into formal sector jobs, where each year of VTE adds 142 to their earnings. This suggests again that formal and informal VTE are not substitutes but prepare people for different careers and carry different rewards in terms of earnings.

The determinants of earnings within the formal private sector differ sharply between Abidjan and other cities. In other cities, steep
- 108 -

premiums are teing paid to graduates with diplomas, in order to prevent them from migrating to Abidjan.

The estimated earnings equations explain much better the variance of wages in the public than in the private sector. This suggests the importance in the latter of unobserved factors such as ability and motivation which contribute to productivity and earnings. We found evidence of positive selecdlon into the private sector, i.e., the private sector is successful in attracting those individuals who would score high on these unobserved factors.
- 109 -

# 10. Interaction Among Human Capital Variables

The specification of the earnings function we used throughout this paper brought out separately the effects of general education and VTE on earnings, by type and level of education, and by whether or not a diploma was obtained. It did not, however, bring out any interaction between these variables, e.g., whether the impact of VTE on earnings depended upon what was t- highest general education diploma obtained.

To capture such interactions, we initially experimented with introducing interaction variables into the earnings equation, such as between years of VTE and general education diplomas. These variables did not turn out to be significant. It is likely that the small sample size of our data base did not yield suffficient variation within each of the interacted cells.

Another way to capture interaction among human capital variables is to split the sampie by level of general education and to see whether the coefficients of experience, VTE, etc. differ across categories. To implement this procedure, we divided the sample into three groups: the first split was at four years of general education, because it has been argued that this constitutes a threshold below which education should not be expected to have significant effects. The second split was done after 10 years of education, which corresponds with completion of the lower secondary curriculum.
- 110 -

The results in Table 37 show that the impact of work experience and VTE on earnings do indeed depend upon the highest level of general education attained. The earnings/experience profile becomes much steeper and also more curved as the level of general education increases. For example, 3 years of experience in the current job adds 15% to the earnings of a person with 0-4 years of education, but adds 34% for a person with 5-10 years of education, and 35% for a person with more than 10 years of education. Ftr the latter category, work experience in a previous job also adds significantly to earnings. However, for the well eiucated worker, the profile flattens out more quickly and reaches a peak after 20 years, against 26 to 27 years for less educated workers.26/ An apprenticeship adds most to earnings for workers with low general education. Well educated workers with apprenticeship training actually earn significantly less than those without such training. As one attains more education, it becomes indeed progressively less 'normal' to switch into an apprenticeship, and those individuals who do so are likely to be dropouts or graduates who were unable to find a job. There is thus a negative selection effect in the combination of an apprenticeship with high levels of general education.

The interaction between formal VTE and general education is not so clear. The effect of secondary VTE on earnings seems greatest for people with 5-10 years of general education, i.e., those individuals who 26/ The positive relation between level of education and the returns to work experience has been observed for many countries. For a further discussion of this phenomenon, see Knight and Sabot (1983).
# Table 37: EARNINGS FUNCTION BY YEARS OF GENERAL EDUCATION

||||G|eneral E|ducation||||
|---|---|---|---|---|---|---|---|---|
||0-4 y|ears|5-10|years|> 10|years|> 6|years|
|Intercept|9.98|(42.6)|10.10|(60.8)|10.05|(14.6)|9.32|(20.3)|
|Years of Primary Schooling|.028|(0.3)|<br>_-||-|_|-||
|Years of Secondary Schooling|-|_|.133|(4.1)|<br>.211|(2.2)|.150|(5.1)|
|Yea.s of Higher Schooling|_<br>-||-_||.143|(3.7)|.151|(4.2)|
|Years of Current Job Experience<br>|.054|(2.1)|<br>.121|(7.3)|<br>.128|(3.3)|<br>.110|(5.8)|
|(Years of Current Job Experience)<br>2|-.0010|<br>(1.2)|-.0023|<br>(4.0)|-.0031|<br>(1.7)|-.0022|(3.1)|
|Years of Previous Job Experience<br>|.024|(0.5)|<br>.040|(0.9)|<br>.242|(3.2)|<br>.098|(2.1)|
|(Years of Previous Job Experience)<br>2|-.0002|<br>(0.1)|-.0002|<br>(0.1)|-.020|(2.9)|-.0053|(1.4)|
|Years of Apprenticeship|.047|(1.2)|<br>.006|(0.2)|-.673|(2.1)|-.253|<br>(3.3)|
|Years of Secondary VTE|-|-|.082|(2.7)|<br>.002|(0.1)|.054|(2.0)|
|Years of Post-Secondary VTE|-|-|-|_|.155|(1.3)|.031|(0.3)|
|Years of Teacher Training|-|-|.060|(0.5)|<br>.090|(0.8)|.077|(1.0)|
|CEPE|-|-|.102|(0.7)|<br>-|_|.975|(2.1)|
|BEPC|-|-|.073|(0.3)|<br>-.212|(0.5)|.819|(1.7)|
|Secondary VTE Diploma|-||.212|(1.2)|-.024|(0.1)|1.10|(2.4)|
|Post-Secondary VTE Diploma|_<br>-||-|-|-.059|(0.1)|1.42|(2.6)|
|Teacher Diploma|-|_|.192|(0.6)|<br>-.052|(0.1)|1.13|(2.3)|
|Other Diploma|-|_|.500|(1.4)|<br>-.150|(0.3)|1.06|(2.2)|
|Sex (1-female)|-.118|(0.5)|-.303|(2.9)|-.053|(0.3)|-.171|<br>(1.7)|
|Non-Ivorian|-.335|(2.1)|-.247|(1.5)|<br>.337|(1.1)|<br>.178|(1.0)|
|Seasonal Job|-.446|(1.4)|<br>-.807|(2.3)|<br>-|-|-.130|(0.2)|
|Abidjan|.431|(2.4)|-.076|(0.8)|-.166|(1.2)|-.154|<br>(1.7)|
|Rural Areas|-.273|(1.1)|-.100|(0.6)|-.051|(1.6)|-.141|<br>(0.8)|
|R2|.25||.|55|.5|5|.|59|
|F|4.31||14.|80|5.9||16.|0|
|n|151||23|8|11|1|25|8|

Note: Absolute t - values in parentheses.
- 112 -

entered secondary VTE at the usual point 'n the curriculum. The effect of post-secondary VTE can of course only be observed for people in the category with more than 10 years of general education. Teacher training can te started with more or less than 10 years of general education, but no significant coefficients were obtained.

We also split the sample after 6 years of general education (completed primary cycle). This permits to compare the effects of the general secondary cycle with the vocational and technical secondary cycle. A year of general secondary education adds 15% to earnings; there is also an 82% premium if a BEPC was obtained. A year of secondary VTE contributes only 5% to earnings, but the premium for a diploma is 110X.

It is also interesting to look at the coefficients of the demographic and location variables. The earnings gap between men and women is largest in the 5-10 years of general education group. The earnings gap. according to nationality disappears with rising education, and even turns positive for non-Ivorians at the upper secondary level and above. There is a selection effect at work here: migrants or children of migrants from outside the C8te d'Ivoire who succeed in obtaining a high level of education must undoubtedly display above average amounts of motivation and persistence. Lastly, earnings of lowly educated workers in Abidjan are 43% above those in other cities, which in turn are significantly above those in rural areas. This easily explains the continued migration into Abidjan from elsewhere in the country. For workers with more than primary
- 113 -

education, however, wages in Abidjan are below those in other cities. This is consistent with our earlier observation of higher earnings in the formal private sector in other cities relative to Abidjan.

The results of the comparison in Table 37 should be treated with caution. Splitting the sample according to level of education raises the question of what determines access to different levels of education. Clearly, the progression to higher levels of education is not a random event. This brings about the possibility of selection bias in OLS estimated earning functions. The two-step methodology we used earlier in this paper to incorporate the selection into different kinds of employment can also be applied to the selection into types or levels of education. The first step then becomes the estimation of a probit model with the determinants of access to education as regressors. The key empirical problem, however, is to obtain a proper set of such regressors. Relevant variables are personal ability (motivation, intelligence, etc.), scholastic achievement, migration and school attendance history, and parental background (education, occupation, wealth, income) at the time the education choices are made. It is obvious that such variables are not readily available in survey data. The consideration of schooling selection is therefore empirically less tractable that than of employment selection.27/ The CILSS data did not contain sufficient information to permit us to explicitly consider selection into schooling types in this paper.

27/ For a further discussion of selection into types of schooling, see, for example, Appendix 3 in Jimenez and Kugler (1986).
- 114 -

# 11. Summary of Main Findings and Policy Issues

There exist in C8te d'Ivoire two systems of acquiring vocational and technical education. In the formal system, students follow a variety of secondary and post-secondary level curricula in institutes which are integrated in the overall educational structure. The informal system consists of apprenticeships, whereby young adults work full time in a small enterprise at zero cash wages while learning a trade. The training is very practically oriented but usually quite limited in scope. Relative to formal VTE, the apprenticeship appeals more to people with little or no general education and to migrants. Also, people who dropped out of the formal VTE system or those who graduated but were unable to find a job become apprentices. In urban areas, one finds about the same percentage of people with formal VTE as with apprenticeship training. In rural areas, however, the apprenticeship system dominates.

The type of VTE a person acquires is a major determinant of access to different kinds of employment as well as of earnings. Apprenticeship graduates are found more frequently among the self-employed, and when they work as wage-earners, they more frequently do so in the informal sector. The latter choice is fully justified as each year of their training adds 11% to their earnings in that sector, against only 42 in the formal sector.
- 115 -

Graduates from the formal VTE system on the other hand are more likely to obtain jobs as employees In the modern sector. There is evidence of credentialism in the recruitment process in the modern sector in C8te d'Ivoire, as diplomas (from VTE as well as general education) enhance the likelihood to obtain wage employment far tore than the years of education. Entrance to government jobs is, however, also determined by the number of years of education. Especially, people with many years of education at the upper end of the education pyramid (higher general education, postsecondary and teacher VTE) are more likely to work in the public sector.

Once a wage job has been obtained, however, diplomas are less important In determining earnings than years of schooling and work experience (except for post-secondary VTE, where diploma is also the main determinant of earnings). On average, a year of secondary or higher general education increases earnings by 13%, which is more than the effect from a year of work experience (8% for experience in the current job, 42 for experience in a previous job). A year of secondary VTE enhances earnings by 6.4%, a year of teacher training by 9%. The completion of a post-secondary VTE curriculum, with diploma, carries an earnings premium of 63%.

The reward structure to human capital differs by type of employment as well as by location within each type. In the private sector, rewards to general education rise sharply with level of education, which is
- 116 -

not the case in the public sector. Work experience is rewarded higher in the private sector than in government service. In cities other than Abidjan, steep premiums are being paid to graduates with diplomas in order to induce them not to migrate to Abidjan. This practice is, however, limited to the formal private sector. The latter sector in other cities is in fact the only place where diplomas are important determinants of remuneration. Elsewhere, credentialism is evident in access, but not in remuneration.

The earnings equations we estimated explain much better the variance of wages in the public than in the private sector. This suggests the importance in the latter of unobserved factors such as ability and motivation which contribute to productivity and earnings. We found evidence of positive selection into the private sector, i.e., the private sector is successful in attracting those individuals who would score high on these unobserved factors.

Among the self-employed, primary education contributes significantly to enhancing earnings of farmers. For non-farming self-employed, secondary general education appears to be the prime determinant of earnings among the human capital variables in Abidjan, and job experience in other locations. Apprenticeships have no significant impact on the earnings of the self-employed. Formal VTE, however, mostly at the secondary level, does enhance farmers' earnings considerably, but It has no effect on the earnings of other self-employed.
- 117 -

The irivate costs of attending VTE in C8te d'Ivoire are fairly modest, mainly as a result of generous scholarship programs. The latter, in combination with expensive school construction programs and the (albeit diminishing) reliance on highly paid expatriate teachers, has, however, resulted in very high institut.onal costs. As a result, social costs of VTE are four to seven times higher than private costs.

The large scholarships received by VTE students as well as the high contribution of VTE to earnings imply that the private rates of return to vocational and technical education are very high in C8te d'Ivoire: 15% for secondary level VTE and for teacher training, and 21% for postsecondary VTE. It is not surprising that such high returns induce many students to try annd gai-n _ac_ - _t-ss_ to formal- T'-- ±-w=t'*stes The recent economic recession in C8te d'Ivoire has, however, caused an oversupply of such graduates, and joblessness among them is high. The government has therefore cut the access quota to vocational and technical schools, resulting in a serious underutilization of facilities. Together with the high level of total institutional costs, this has reduced the social rates of return to VTE to around 4%, with no significant differences by level and type of VTE. This is well below the social opportunity cost of capital (usually estimated at aoout 10%).

The fact that high private returns to VTE have persisted in spite of the joblessnese among graduates points at an inflexibility in the Ivorian labor market in adjusting to the economic recession. It appears that moa. of the adjustment has come through a reduction of employment, while the wages of those who kept a job were maintained at high levels.
- 118 -

The situation calls for several policy actions. The private rates of return to VTE are higher than those obtainable from many alternative investments. Hence, there is scope to reduce scholarships for VTE students without endangering a sufficient supply of students. This would at the same time raise the social returns to VTE. The ongoing replacement of expatriate teachers by Ivorians will also contribute to reducing institutional costs. Construction programs especially for post-secondary facilities should be carefully scrutinized, and, in general, the focus should be on more efficient utilization of existing VTE institutes. In coordination with other economic policies, actions to make the labor market more flexible and responsive to changes in supply and demand would contribute to sending the proper economic signals to prospectiveIV= t- udents, t.hus ma ebe **VLM. 57them** - **UIU-** ---U--- **lvL-** changing labor market conditions.

The role of the apprenticeship as an informal way to acquire VTE can be upgraded. At the moment, formal and informal VTE are not substitutes since they prepare for different careers. An apprenticeship prepares best for wage work in the informal sector, and there its returns are comparable to those obtained in the formal sector from formal VTE. The excess capacity of the formal VTE institutes could be used, for example, to set up short-term vocational and technical courses which teach ski<sup>l</sup> le complementary to those typically acquired in an apprenticeship. Such courses would not have the general education entrance requirements of the formal curricula and should mainly be given at night to be compatible with apprentices' work schedule. This would provide a training of which the level is in-between the currently existing formal and informal systems.
- 119 -

Formal as well as informal VTE prepare poorly for own account work. This could be remedied by including modules in the curricula that deal directly with setting up a business, credit, marketing and other Issues relevant to work for own account. These topics could also be dealt with in the suggested evening courses for apprentices.

Formal VTE in C8te d'Ivoire has been too much geared towards employment in the modern sector, whilst informal VTE does not suitably prepare trainees for own account work. Both types of VTE therefore fail to contribute as much as they could to the informal sector which, in view of the limited labor absorption capacity of the modern sector, must be a major focus for employment creation. The number of VTE graduates turning to own _aaccnt_ **L** i£ **21Wnly** iet-rffi bbut the 4lid--!oe and emDloiment generation potential of the informal sector is yet to be fully realized. A redirection of both formal and informal VTE in C8te d'Ivoire could make a major contribution to that effect.
- 120 -

- Achio, Francoise. Les Politiques, la Planification et l'Administration de l'Enseignement Technique et Professionnel en C8te d'Ivoire, Abidjan 1983.

- Ainsworth, Martha and Juan Munoz. The C8te d'Ivoire Living Standards -

- Survey Design and Implementation, Living Standards Measurement Study Working Paper No. 26, The World Bank, Washington D.C., 1986.

- Blinder, Alan. On Dogmatism in Human Capital Theory, Jcurnal of Human Resources, Vol. XI (1), 1976.

- Coulibaly, Aly. L' Apprentissage Traditional, sa Contribution a la Qualification des Travailleurs des Secteurs Informel et Moderne, Cahiers Formation Emploi, No. 2, 1986.

-

- den Tuinder, B. Ivory Coast The Challenge of Success. Johns Hopkins University Press, Baltimore, 1978.

- FNR (Fonds National de R6gulation), Exercise 1983-84 - Statistiques, Abidjan, Mai 1985.

- Griliches, Z. Estimating the Returns to Schooling: Some Econometric Problems, Econometria, VoL 45 (1), **1977,**

- Grootaert, Christiaan. Measuring and Analyzing Levels of Living in Developing Countries: an Annotated Questionnaire, Living Standards Measurement Study Working Paper, No. 24, the World Bank, Washington D.C., 1986a.

- Grootaert, Christiaan. The Position of Migrants in the Urban Informal Labor Markets in C8te d'Ivoire, mimeo, Development Research Department, The World Bank, Washington D.C., 1987.

- Grootaert, Christiaan. The Role of Employment and Earnings in Analyzing Levels of Living - A General Methodology with Applications to Malaysia and Thailand, Living Standards Measurement Study Working Paper, No. 27, The World Bank, Washington D.C., 1986b.

- Guirassi, Ibrahima. La Formation en C8te d'Ivoire, Cahiers Formation Emploi, No. 2, 1986.

- Heckman, James. The Common Structure of Statistical Models of Truncation, Sample Selection and Limited Dependent Variables and a Simple Estimator for Such Models. Annals of Economic and Social Measurement, Vol. 5(4), 1976.

- Heckman, James. Sample Selection Bias as a Specification Error. Econometrica, Vol. 47(1), 1979.

- Jamison, Dean and Lawrence Lau. Farmer Education and Farmer Efficiency, Johns Hopkins University Press, Baltimore, 1982.
- 121 -

- Jimenez, Emmanuel and Bernardo Kugler, with Robin Horn. An Economic Evaluation of a National Job Training System: Colombia's SENA, Education and Training Department Discussion Paper No. 24, The World Bank, Washington D.C., 1986.

- Knight, J.B. and R.H. Sabot. Why the Returns to Experience Increase with Education, mimeo, Development Research Department, The World Bank, Washington D.C., 1983

- Maddala, G.S. Limited Dependent and Qualitative Variables in Econometrics. Cambridge University Press, Cambridge, 1983.

- Mincer, Jacob. Schooling, Experience and Earnings, New York, National Bureau of Economic Research, 1974.

- ONFP. (Office National de Formation Professionnelle). Bilan de 1' Enseignement Technique et de la Formation Professionelle, Abidjan, 1984.

- ONFP. Les Besoins Prioritaires de la Formation Professionnelle Continue en M8te d'Ivoire, Abidjan, 1985.

- ONFP. Repertoire des Moyens de Formation en Republique de C8te d'Ivoire, Abidjan, 1986.

- ftaai;.-, C-e;ge .Rt-- s t u'_t' n: .^ivvt4rv A Interntional<sup>4</sup> Update and Implications, Journal of Human Resources, Vol. XX(4), 1985.

- Vandergaag, J. and W. Vijverberg. gage Determinants in C8te d'Ivoire. Living Standards Measurement Study Working Paper, No. 33, The World Bank, Washington D.C., 1987

- World Bank. World Development Report 1986, Oxford University Press, New York, 1986.
- 122 -

# **APPENDIX 1:** Some **Specification Issues legardiug tbe Earalugs Fuactila**

## **Ability** and Other Unobserved Variables

The argument **is** often made that the coefficients of the schooling, training, and experience variables in an earnings function overestimate the effects on earnings of these factors because the regressions typically do not control for ability, motivation, and other such 'unmeasurable" variables. Work by psychologists and education specialists has indicated that the home environment where a child grows up **can** affect his/her performance in school. The home environment in turn is t- **.2..** **_de_ree_** d-ete **1A..,,i .f the ed-a ren** F wb **ahe t h,** e **,a LU** ~ ~ ~ ~~-j ----becomes a (second degree) proxy for some of the aforementioned unmeasurables. To check for such effects, we added the years of schooling of the father and mother to the earnings function. The results in Table A1.1 lead to the conclusion that parental education has no significant effect on earnings. (We also tried highest diploma obtained by the parents, but no significant coefficients were obtainec either.) Since it has been argued that parents' characteristics may influence boys and girls differently, we also split the sample of employees by sex, but a significant effect is observed for neither sex. Incidentally, we may note from Table **A1.1** that the coefficients of the human capital variables differ vastly by sex, not an uncommon finding.
- 123 -

# TABLE Al.1: EARNINGS FUNCTION (1nW2 ) WITH PARENTAL EDUCATION VARIABLES

||Al|l|Ma|le|Fem|ale|
|---|---|---|---|---|---|---|
|Intercept|9.952|(80.8)|9.833|(67.7)|9.980|(47.8)|
|Years of Primary Schooling|.039|(1.5)|<br>.059|(2.0)|-.097|(1.4)|
|Years of Secondary Schooling|.130|(5.3)|<br>.121|(4.2)|<br>.182|<br>(3.8)|
|Years of Higher Schooling|.158|(4.2)|<br>.176|(4.2)|<br>.059|<br>(0.6)|
|Years of Current Job Experience<br>|.096|(7.1)|<br>.106|(6.9)|<br>.055|<br>(1.7)|
|(Years of Current Job Experience)<br>2|-.0018|<br>(3.9)|-.0020|<br>(3.9)|-.0008|<br>(0.7)|
|Years of Previous Job Experience<br>|.040|(1.6)|<br>.038|(1.4)|<br>.143|<br>(0.8)|
|(Years of Previous Job Experience)<br>2|-.0011|<br>(0.6)|-.0009|<br>(0.5)|-.0085|<br>(0.6)|
|Years of Apprenticeship|.020|(0.9)|<br>.022|(1.0)|<br>.105|<br>(0.9)|
|Years of VTE|.063|(2.2)|<br>.077|(2.3)|<br>.030|<br>(0.6)|
|CEPE|.125|(0.8)|.118|(0.7)|.548|(1.3)|
|BEPC|.120|(0.5)|<br>.014|(0.1)|<br>.671|<br>(1.3)|
|VTE Diploma|.339|(1.7)|.281|(1.2)|.979|<br>(2.1)|
|Other Diploma|.324|(1.2)|<br>.282|(0.9)|<br>.990|<br>(1.3)|
|Sex (1-female)|-.270|(2.8)|<br>_<br>|-|-_||
|Non-Ivorian|-.292|(2.9)|-.279|(2.4)|<br>.058|<br>(0.2)|
|Seasonal Job|-.640|(3.0)|-.590|(2.5)|-1.593|<br>(2.4)|
|AtUXUJan|.u0o|(0.)|- -.<br>V;Y|(0.1)|.098|(0.I)|
|Rural|-.268|(2.1)|-.282|(2.0)|<br>.340|<br>(0.7)|
|Father's Years of Schooling|.019|(1.4)|<br>.026|(1.5)|<br>.020|<br>(0.8)|
|Mother's Years of Schooling|-.0002|<br>(0.1)|<br>.001|(0.1)|-.026|(0.6)|
|R<sup>2</sup>|.58||.58||.70||
|F|31.9||26.8||8.2||
|n|484||396||88||

# Note: Absolute t - values in parentheses.
- 124 -

Where significant, the coefficients of all schooling variables (except secondary) and experience are greater for men. The diploma variables on the other hand have systematically larger coefficients for women. It is, however, beyond the scope of this paper to investigate further sex differences in the returns to human capital.

# Cognitive Skills

The CILSS recorded self-reported literacy and numeracy for respondents above the age of 4. It is of interest to know whether these skills have an effect on earnings independent of the years of schooling. To that effect, we split the people in the sample with no diploma into UBKiWt W.1d read, E--c, r-- do - **_n,_A_ nthn1aQ** The results indicated no significant effect from these skills that could be separated from the years of primary schooling during which the skills are acquired. (There is no need to introduce these skills at a higher level, since everyone in the sample with at least a CEPE reported being literate and numerate.)

# Hours Worked

In the main text of the paper, we argued for the use of monthly earnings as dependent variable in the earnings functions (rather than hourly wage) because a month is the most relevant time period for supply, demand, and remuneration of wage labor in C8te d' Ivoire. Nevertheless,
- 125 -

the question can be raised whether an earnings function should control for actual labor supply during the reference period. Our view is that it should not because the earnings function should estimate the contribution of human capital to earnings, as reflected in the transaction agreement that was reached between suppliers and buyers of labor services. In C8te d'Ivoire, this agreement typically sets a monthly wage.

Nevertheless, the issue is in part empirical, and we re-estimated the earnings functions for government and private sector employees with ln (monthly hours) added to the specification. The coefficient of this variable is likely to be between 0 and 1. Unit elasticity would imply that the wage rate and monthly earnings models are equivalent. A value between n ***n" i 1** _4A4^a*-o a Ae^14.4w9_ **t-** * AdAiti **h-.1** of work. Zero elasticity means that remuneration is invariant with respect to hours, i.e., that the chosen time period is th¢ relevant one for supply and demand of labor. The coefficient for ln (hiours) for government employees was not significantly different from zero (.072, t-.9), while the one for private sector employees was .266 (t-2.4). In other words, the Ivorian government pays by the month and whatever variance in hours worked by employees exists has no effect on earnings. It is perhaps surprising that in the private sector the same practice dominates and increasing labor supply has sharply diminishing returns. These results confirm the appropriateness of using monthly earnings as transaction price for labor. Moreover, R<sup>2</sup> as well as the human capital coefficients were not significantly affected by the inclusion of the hours variable. Therefore, on both a priori and empirical grounds, the hours variable was not included in the regressions in the mAin text of the paperz
- 126 -

# APPENDIX 2: C isa1 **with Other stlmates**

In a recent paper, Vandergaag and Vijverberg (1987 - hereafter VV) also estimate earnings equations based on the CILSS data. The comparison of their major results with ours in Table A2.1 shows differences in the magnitude and/or significance of almost all estimated coefficients. VV's conclusions hence differ both quantitatively and qualitatively from ours, and it seems worthwhile to investigate where the differences come from and which findings present the proper empirical basis for policy applications.

The differences are due to at least four factors: (1) Different dependent variable: VV use ln (hourly wage), while we use ln (monthly wage) for reasons explained in section 7 of this paper. Moreover, in this particular data set, our experience indicates that the hours and days worked daca are of questionable quality (for example, the transformation from monthly to hourly wages "creates" outliers). More important, the 'days" question asked about actual days worked in the reference week while the "hours" questions asked for typical hours. In our opinion, one should not mix actual and typical time use information to explain actual earnings.
# Table A2.1: COMPARISON BETWEEN VV ESTIMATES AND THIS PAPER

||All Em|ployees1/|Gov<br>Emp|ernment<br>loyees 2/|Private<br>Empl|<br>Sector<br>oyees2/|
|---|---|---|---|---|---|---|
||W|This Paper|W|This Paper|W|This Paper|
|Years of Primary Schooling<br>|na<br>|.042<br>|ns|.095|ns|.059|
|Years of Lower Secondary Schooling<br>|.088<br>|<br>.126<br>|.205|<br>.142<br>|ns|.109<br>|
|Years of Higher Secondary Schooling<br>|<br>ns<br>|]<br> <br>|ns|J|ns|IJ|
|Years of Higher Schooling<br> <br>|.208|<br>.123<br>|.205|<br>.082|.300|<br>.196|
|Years of Secondary<br>VTE<br> <br>|,<br>|.069<br>||ns||.139|
|Years of Post-Secondary<br>VTE<br>|.072|<br>ns|ns|n|.098|<br>ns|
|Years of Teacher Training<br>||as|_|ns||ns|
|Years of Apprenticeship<br>|ns<br>|ns<br> <br>|.067|<br>ns|ns|.053|
|Years of Current Job Experience<br> <br>2|.107<br>|<br>.092<br> <br>|.087|<br>.047|.116|<br>.084|
|(Years of Current Job Experience)<br><br>|-.0019<br>|<br>-.0017<br>|ns|ns|-.023|<br>-.0018|
|CEPE<br>|.494<br>|<br>ns<br>|.801|<br>ns|.395|<br>no|
|BEPC<br>|.594|<br>no|.424|<br>ns|.617|<br>ns|
|Secondary VTE Diploma<br>Post-Secondary<br>VTE Diploma<br>|_<br>ns|nso<br>.876|ns|no<br>no|ns|ns<br>ns|
|Teacher Diploma<br>||ns<br>o<br>||ns|_|ns|
|Other Diploma<br>|.536|<br>.508<br>|.621|<br>ns|ns|no|
|Female<br>|ns|-.204|ns|-.444|ns|-.255|
|Non-Ivorian|ns|-.275|_|ns|.285|<br>ns|

ns - Not significant at .10 level. 1/ OLS estimates. 2/ Selection corrected estimates.
- 128 -

- (2) Different treatment of outliers: VV omitted a number of cases with low hourly wages. We have not omitted any cases, but recoded outliers - usually with the largest non-outlying value - after checking for inconsistency with expenditure data.

- (3) Different specification of the earnings equation: Two explanatory variables in the VV regressions appear questionable. First, a cognitive skills variable is included which "is zero if the individual cannot write or read or do arithmetic, and increases with 1 for each of the skills acquired." (p.9) The underlying assumption of equal productivity effect of each of these skills appears most implausible. Moreover, such a variable is likely to introduce collinearity as it has no variance for individuals with a CEPE or above (i.e., the vast majority of employees), who all reported possessing all three skills. Second, VV have proxied total work experience by age minus schooling minus 5. As we explained in the paper, this is inappropriate in the Cote d'Ivoire context. It is preferable to rely on the two direct measures of work experience available in the CILSS (of which VV use only one). Lastly, W's earnings equations do not control for location. Our finditgs indicate that this is an important omission.
- 129 -

(4) Different s4ecification of the sector choice equation: VV's choice equation has very few explanatory variables: age, sex, diplomas, the cognitive ekills variable, and years of schooling (not distinguished by level). The results of our probit equation (Table 34) clearly indicete that this is an incomplete specification. VV's finding of insignificance of years of schooling is reversed once level and type of schooling are distinguished. Indeed, it is one of our main findings that type and level of schooling are major determinants of choice of type of employment. Also, the regional dimension was again not considered in VV'a model. One indication of the completeness of the specification is that VV's probit equation predicts only 71Z of the observations correctly, against 82% for our specification.

To have an idea of the effects of (1) and (2) we reestimated the "all employees" equation with hourly wage as dependent variable, and with the original unrecoded data. The results in Table A2.2 show that the recoding had only small effects on the estimated coefficients, but did significantly improve the fit of the equation. The only important change in individual coefficients was a reduction of the coefficient for years of higher education f?om .20 to .16 (this was due to the recoding of a few - - very extreme outliers 25 to 50 times larger than the next highest value in commissions and in-kind-income reported by university graduates).
o

# Table A2.2: ALL EMPLOYEES EARNINGS FUNCTION

# WITH DIFFERENT DEPENDENT VARIABLE

||ln|W2|In (W2 p|er hour)|In (raw|data W2)|
|---|---|---|---|---|---|---|
|Intercept|9.967|(82.8)|4.650|(34.8)|9.986|(73.8)|
|Years of Primary Schooling|.042|(1.6)|<br>.026|(0.9)|<br>.049|(1.7)|
|Years of Secondary Schooling|.141|(6.0)|<br>.163|(6.2)|<br>.133<br>|(5.0)<br>|
|Years of Higher Schooling|.160|(4.4)|<br>.189|(4.7)|<br>.203|(4.9)|
|Years of Current Job Experience<br>|.091|(7.0)|<br>.094|(6.4)|<br>.096|(6.6)|
|(Years of Current Job Experience)<br>2|-.0017|(3.7)|-.0017|<br>(3.3)|-.0019|(3.6)|
|Years of Previous Job Experience<br>|.040|(1.6)|<br>.032|(1.2)|<br>.044|(1.6)|
|(Years of Previous Job Experience)<br>2|-.0011|(0.7)|-.0008|(0.4)|-.0015|<br>(0.8)|
|Years of Apprenticeship|.019|(0.9)|<br>.018|(0.8)|<br>.031|(1.3)|
|Years of VTE|.061|(2.2)|<br>.066|(2.1)|<br>.058|(1.9)|
|CEPE|.122|(0.8)|<br>.231|(1.3)|<br>.086|(0.5)|
|BEPC|.087|(0.4)|<br>.143|(0.5)|<br>.027|(0.1)|
|VTE Viploma|.309|(1.6)|<br>.389|(1.8)|<br>.285|(1.3)|
|Other Diploma|.275|(1.1)|<br>.611|(2.2)|<br>.067|(0.2)|
|Sex (1-female)|-.213|(2.4)|-.105|(1.0)|-.227|(2.2)|
|Non-Ivorian|-.284|(2.8)|-.326|(2.9)|-.322|(2.9)|
|Seasonal Job|-.634|(3.0)|-.520|(2.2)|-.684|(2.9)|
|Abidjan|.014|(0.2)|-.003|(0.1)|-.026|(0.3)|
|Rural Areas|-.276|(2.2)|-.045|(0.3)|-.225|(1.8)|
|R2|.58||.57||.52||
|F|37.3||35.8||29.5||
- 131 -

The change of dependent variable to an hourly basis, however, had major effects on the coefficients and their significance. It reduced the estimated coefficient and t-value of primary education and increased that of other levels of education. It also increased coefficients and significance of all diploma variables. Clearly, two of VV's conclusions, viz. the sharp progression of returns to education with level of education and the importance of diplomas for earnings, critically depend upon their choice of hourly wage as dependent variable. Using monthly wage data, this paper has shown that the increase of the effect of education on earnings with level of education is much milder and that diplomas generally do not affect earnings, except in the formal private sector in other cities.
- 132 -

# APPENDIX 3: **Iustitutional Costs:** Detailed Tables

The cost analysis in the main text considers three levels of VTE: secondary, post-secondary, and teacher training. In this appendix, we show the institutional cost calculations at a more disaggregated level. We also explain the data sources and the assumptions that were necessary to complete the calculations.

For the secondary level, Table A3.1 shows the cost calculations for 5 types of institutions:

- technical high school (Lycee Technique)

- vocational high school (Lycee Professionnel)

- technical college (College d'Enseignement Technique)

- vocational training center (Centre de Formation Professionnelle)

- other training center (Centre de Formation Artisanale, Centre de Formation Professionnelle Specialise)

The main data sources were the 1987 budgets of the Ministry of Vocational and Technical Education and the National Office of Vocational Training (ONFP).1/ While these budget data break down temporary staff salaries and operating expenses (except utilities and communications) by type of institution, only a global figure is available for permanent staff

- 1/ The use of budget figures as data source instead of actual expenditure figures is necessitated because the latter are only available with a lag of several years. However, in the fiscal austerity climate currently present in Cote d'Ivoire, actual expenditures are likely to fall within a couple of percentage points of budgets.
# TABLE A3.1: INSTITUTIONAL COSTS FOR SECONDARY LEVEL VTE INSTITUTIONS

||All 1/|Technical<br>High Scho)ol|Vocational<br>High School|Technical<br>College|Vocational<br>Training<br>Center|Other<br>Training<br>Center|
|---|---|---|---|---|---|---|
|Personnel Expenses|=||'000|CFAF-----|||
|-<br>Permanent Ivorian Staff<br>-<br>Salaries<br>-<br>Housing Allowance|5,616,000<br>436,957|<br>785,898<br> <br>94,308|1,192,463<br> <br>143,096|<br>781,581<br> <br>93,789|<br>712,275<br> <br>85,473|<br>169,093<br> <br>20,291|
|-<br>Temporary Staff|266,906|<br>18,330|<br>72,380|<br>26,000|<br>48,520|<br>14,680|
|-<br>Technical Assistants<br>-<br>Cooperation<br>Contract<br>-<br>Local Contract<br>Subtotal|2,710,769<br>83,665<br>9,114,297|1,227,317<br>45,050<br>2,170,903|1,088,577<br>25,743<br>2,522,259|<br>170,757<br>6,436<br>1,078,563|<br>170,757<br>6,436<br>1,023,461|<br>53,362<br>-<br> <br>257,426|
|Operating Expenses|4,167,548|<br>397,257|<br>699,936|<br>322,309|<br>446,763|<br>124,876|
|Scholarships|150,200|<br>45,150|<br>39,874|<br>34,002|<br>24,506|<br>6,669|
|Total Recurrent Costs|13,432,045|2,613,310|3,262,069|1,434,874|1,494,730|<br>388,971|
|(Enrollment)|(7,545|)<br>(2,268)|<br>(2,003)|<br>(1,708)|<br>(1,231)|<br>(335)|
|Pecurrent Cost per Student|1,780.258|1,152.253|1,628.592|<br>840,090|1,214.241|1,161.107|
|Amortization<br>of Buildings and<br>Equipment (per Student)|505.711|<br>87.009|1,683.857|<br>25.316|<br>148.709|<br>57.281|
|Total Cost per Student|2,285.969|1,239.262|3,312.449|<br>865.406|1,362.950|1,218.388|

1/ Includes costs of schools plus central administration costs of Ministry of Vocational and Technical Education and the National Office of Vocational Training (ONFP)
- 134 -

salaries, expenses for utilities and communications, and scholarships. The salaries for individual types of institutions were therefore calculated on the basis of the number of teachers (see Table 23 in the main text). Utilities and communication expenses and scholarships were allocated on the basis of the number of students. As a result, the figures for each type of institution may have a wider margin of error than the figures for the entire secondary VTE system.

The budget data on salaries also do not include the important housing allowances. These vary from teacher to teacher, but an inspection of actual payroll data showed that they were on average 12% of base salaries and this figure was used in the calculations.

Salaries of expatriate technical assistants are also excluded from published budget data. They were therefore estimated on the basis of the number of expatriate teachers in each type of institution. For regular "cooperation contracts" we used published French civil servant salary levels, to which an expatriate premium and a housing allowance were added. This yielded an average annual figure of 14,926,320 CFAF, of which C8te d' Ivoire pays 71.5%, i.e. 10,672,319 CFAF. Some technical assistants are directly hired by the C8te d'Ivoire government (so-called "local contracts"), and are paid according to a special salary scale. Our figures are based on the midpoint of that scale, to which also a housing allowance was added. An average local contract cost 6,435,672 CFAF per year.
- 135 -

For vocational high schools, amortization was calculated from cast figures of the Third Education Project, assuming an economic life of twenty years for buildings and five years for equipment. For other Institutions, we used amortization figures calculated by ONFP.

No cost calculations were made for adult training centers, because the available data base was much weaker than for the other institutions. Moreover, courses offered by these centers range from a few days to several months. Thus, a calculation of costs per student is really meaningless, and instead costs should be calculated per student-day (or even per student-hour, since many courses are only held for a few hours per day). Data on the total number of student-days or student-hours are, however, not available (see also Appendix 4).

The post-secondary level cost data are those for the National Institute of Higher Technical Educaion (INSET), which offers curricula in many different fields. INSET is an independent institute with its own budget, from which were derived the figures in Table A3.2. The calculation of housing allowances and technical assistant salaries used the same assumptions and sources as for the secondary level. Scholarship figures are only known for INSET and IPNETP combined, and they were allocated on the basis of number of students. Amortization figures are those of ONFP.

For teacher training, three types of institutions were distinguished: training centers for primary school teachers (CAFOP/ENI),
- 136 -

TABLE A3.2: INSTITUTIONAL COSTS: INSET

|Personnel Expenses|'000 CFAF|
|---|---|
|-<br>Permanent Ivorian Staff<br>-<br>Salaries<br>-<br>Housing Allowance|1,317,000<br>158,040|
|-<br>Temporary Staff|65,000|
|-<br>Technical Assistants||
|-<br>Cooperation Contracts|1,323,368|
|-<br>Local Contracts<br>Subtotal|64,357<br>2,927,765|
|Operating Expenses|1,933,000|
|Scholarships|694,650|
|Total Recurrent Costs<br>|5,555,415|
|Enrollment : 1250<br>||
|<br>Recurrent Cost per Student|4, 444332|
|<br>Amortization<br>of Buildings and||
|Equipment (per Student)|2,874.983|
|Total Cost per Student|7,319.315|
137 -

-

the Higher Institute for Teachers Training (ENS), and the National Instutute for the Training of Technical and Vocational Teachers (IPNETP) (Table A3.3), The CAFOP/ENI figures come from the budget of the Ministry of Primary Education. Since we were unable to obtain the number of technical assistants in these institutes, we assumed the same proportion of expatriates in the teaching staff as for the entire secondary VTE system. Amortization data come from the Third Education Project. The ENS and IPNETP are independent institutes and the figures are derived from their respective budgets. Housing allowances were added to salary figures and expatriates' salaries were based on the actual number of expatriate teachers. Amortization figures are based on ONFP calculations.
Table A3.3: INSTITUTIONAL COST,S OF TEACHER TRAINING INSTITUTES l l

||CAFOP/ENI|I<br>ENS|IPNETP|
|---|---|---|---|
|||1'000 CFAF--||
|Personnel Expenses||||
|-<br>Permanent Ivorian Staff<br>-<br>Salaries<br>-<br>Housing Allowance|1,390,524<br>1D56,863|790,000<br>94,800|341,000<br>40,920|
|-<br>Temporary Staff|1.i7,050|19,500|43,400|
|-<br>Technical Assistants<br>-<br>Cooperative Contracts)<br>-<br>Local Contracts<br>)|1,221,688|885,802<br>128,713|405,548|
|Subtotal|2,936,125|1,918,815|830,868|
|Operating Expenses|731,510|311,200|169,750|
|Scholarships||||
|-<br>Regular Students<br>- Teachers on Leave|94,200<br>_|1,563,700<br>650,955|147,350<br>_|
|Total Recurrent Costs|3,7151,835|4,444,670|1,147,968|
|(Enrollment)|(1,570)|(2,100)|(265)|
|Recurrent Cost per Student|2,396.073|2,116.509|4,331.955|
|Amortization of Buildings and||||
|Equipment (per Student)|765.695|677.283|350.955|
|Total Cost per Student|3,161.768|2,793.792|4,682.910|
> - 139 -

# APPENDIX 4: Short-Tera **TrMLang In CMte d'I** Ivoire

Short-term training (defined as less than one year in duration) is only available as part of Cbte d'Ivoire's continued training system ("formation professionnelle continue" (FPC)), i.e., for people currently part of the work force. In the basic training system ("formation professionnelle initiale"), the minimum course duration is one year, and the majority of curricula are two to three years. Short-term training is available in the following ways:

- (1) in the centers operated by the Institut National de

Perfectionnement Permanent (INPP) (capacity: about 2,000 students). The INPP regroups 11 different centers, offering training in many subjects ranging from mechanics, construction, printing, etc. to adult literacy and management;

- (2) in the Ateliers d'Applications et de Production (AAP), which provide further training to traditional craftsmen and to graduates of Centres de Formation Professionnelle, mostly in the areas of carpentry, construction, and mechanics

- (capacity: 870 students);
- 140 -

- (3) on the campus of INSET and the University of Abidjan, at the post-secondary level; and

- (4) in enterprise training centers, in private training centers such as Centre Ivoirien de Gestion des Entreprises (CIGE), and in centers operated by public enterprises such as SODECI, SOTRA, etc. (capacity: about 4,000 students).

In principle, the FPC system is financed by a payroll tax, currently 1.2X, which must be paid by all registered enterprises.l/ The tax, which in 1985-86 yielded 3.8 billion CFAF, is administered by the Fonds National de Regulation (FNR). The first half of the tax (the so-called "0,6") can be used by enterprises for training of their choice. Upon presentation of invoices, they are reimbursed by FNR. For the second half (called the 'plus 0,6"), training must be pre-approved by FNR. This part of the tax serves as a subsidy to small enterprises whose training costs exceed 1.2% of their payrolls, and as a transfer from the modern sector to the small-scale urban sector, as well as to rural areas (e.g., to finance training programs in the context of rural development). The results of the FNR operations show that such transfer indeed takes place, although middle size enterprises (100-200 workers) receive a larger share of their training expenses from FNR than smaller ones, both as reimbursements and subsidies (see FNR, 1985).

- 1/ There is another payroll tax of 0.52, which goes to the budget of ONFP, as a contribution to financing basic training.
- 141 -

In 1985-86, about 1,100 million CFAF were rexmbursed for training under the "0,6" and 637 million CFAF were granted as training subsidies under "plus 0,6." In addition, 862 million CFAF were spent on sectoral and general training actions. Notice that the latter actions take place at the initiative of the FNR, while the former two types of training take place at the initiative of the enterprise.

It is virtually impossible to calculate the unit cost of short-term training in C8te d'Ivoire, because of the large number of institutions and the wide range of types of training involved. Moreover, given that the duration of the courses ranges from a few days to a few months, cost figures per student are really meaningless and costs should be eIculateu On a per-uUUUL-t-Uay Or **pe -CruueLw1L-UUr Davi. InC frELe** , **WLILJl1** would be in the best position to perform such a calculation, does not, however, main;ain the necessary data base. Yet, some idea of cost-per-day can be obtained from the pay scales used by FNR to approve training requests. Trainer compensation ranges from 57,000 to 182,000 CFAF per day. A back-of-the-envelope calculation made by INPP staff, based on the budget of some actual training programs, put the average cost-per-day around 100,000 CFAF. Assuming 200 teaching days per year, such a cost exceeds that of basic vocational and technical education (calculated at 2,085,051 CFAF per year per student in section 7 of this paper) for class sizes of less than ten students, which are the norm for most short-term training courses.
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- 143 -

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# PPR Working Paper Series

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|---|---|---|---|---|
|WPS1|Imports Under a Foreign Exchange<br>Constraint|Cristian Moran|March 1988|C. Hambidge<br>61539|
|WPS2|Issues In Adjustment Lending|Vinod Thomas|March 1988|C. Hambidge<br>61539|
|WPS3|CGE Models for the Analysis of Trade<br>Policy in Developing<br>Countries|Jahfte<br>de Melo|March 1988|C. Hambidge<br>61539|
|WPS4|Inflationary<br>Rigidities<br>and<br>Stabilization<br>Policies|Miguel A. Kiguel<br>Nissan Liviatan|April 1988|M. Kiguel<br>61761|
|WPS5|Comparisons<br>of Real Output In<br>Manufacturing|Angus Maddison<br>Bart van Ark|April 1988|E. Zamora<br>33706|
|WPS6|Farm-Nonfarm<br>Linkages in Rural Sub-<br>Saharan Africa|Steven Haggblade<br>Peter B. Hazell<br>James Brown|April 1988|C. Spooner<br>37570|
|WPS7|Institutional<br>Analysis of Credit<br>Cooperatives|Avishay Braverman<br>J. Luis Guasch|April 1988|C. Spooner<br>37570|
|WPS8|Prospects for Equitable Growth in<br>Rural Sub-Saharan<br>Africa|Steven Haggblade<br>Peter B. Hazell|April 1988|C. Spooner<br>37570|
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|WPS12|Teacher-NonTeacher<br>Pay Differences<br>in Cote dlIvoire|Andre Komenan<br>Christiaan<br>Grootaert|June 1988<br>|R. Vartanian<br>34678|
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|WPS13Objectives and Methods of a World||||
|Health Survey|Trudy Harpham<br>Ian Timaeus|June1988|A. Menciano<br>33612|
|WPS14The Optimal Currency Composition<br>of||||
|External Debt|StlJn Claessens|June1988|S.Berteismeler<br>33768|
|WPS15 Stimulating<br>Agricultural<br>Growth and<br>Rural Development In Sub-Saharan||||
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|WPS16Antidumping<br>Laws and Developing||||
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|WPS17Economic Development<br>and the Debt<br>Crisis|Stanley Fischer|June1988|C.Papik<br>33396|
|WPS18China's Vocationa:<br>and Technical<br>Training|Harold Noah<br>John Middleton|June1988|W.Ketema<br>33651|
|WPS19 Cote d'lIvoire's<br>Vocational and<br>Technical Educetion|Christiaan<br>Grootaert|<br>June1988|R.Vartanian<br>34678|
|WPS20Imports and Growth in Africa|Ramon Lopez<br>VInod Thomas|June1988|61679|
|WPS21Effects of European VERs on Japanese<br>Autos|Jaime de Melo<br>Patrick Messerlin|June1988|S.Fallon<br>61680|
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|WPS23Cost-Effective<br>Integration<br>of<br>Immunization<br>and Basic Health Services<br>in Developing<br>Countries: The Problem<br>of Joint Costs|A. Mead Over, Jr.|||
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