Link between household background, education and individual earnings in Botswana

Abstract

The paper estimates the impact of household variables: parental education, household income, household size and location on education and earnings outcomes of an individual. The paper concludes with comments on the implications for policy and future research. The study uses cross-sectional data for 2009/10 Botswana Core Welfare Indicators Survey (BCWIS) from Statistics Botswana. The methodology adopted to estimate the link between household background and education attainment follows the Ordered Probit method and for estimation of earnings outcomes it follows the method proposed by Mincer called Mincerian Earnings Function. Estimation is run on STATA 13 software package, taking the problem of heteroscedasticity and multicollinearity into account. The results of the paper show that children’s education is strongly related to household structure; parental education, household income, location and size of household. Findings from the Mincer earnings function show that household background factors raise individual earnings outcomes. We conclude that household variables not only influences educational attainment but also provides children with substantial wage returns in adult life.