Private rate of returns to investment in education for teachers with bachelor’s degree in public secondary schools in Kenya

Abstract

The theory of human capital postulates an increase in earnings at different levels of educational qualifications. However, there are mixed findings and interpretations on return to investment in education around the world. This is attributed to differences in methodology and methods of data analysis. By employing the Mincer regression equation this paper presents findings on private rate of return to investment in higher education for teachers with bachelor’s degree using a sample of 484 teachers. Primary data was collected using a questionnaire. The multivariate regression results showed years of schooling negatively affected private rate of return to schooling for secondary school teachers having bachelor’s degree, while experience and experience squared had positive effect on private rate of return to schooling. Based on Mincer regression equation generated, the private rate of return to schooling for secondary school teachers having bachelor’s degree in Kenya was 58.18%. Owing to increasing direct private costs to education, it is profitable for individuals intending to invest in higher education do so at a younger age so as to reap maximally from investment in higher education.