Does education reduce gender differentials in labor market participation? A Kenyan perspective

Abstract The paper examines the role of education in reducing gender differentials in the Kenyan labor market. Using 2015/16 Kenya Integrated Household Budget Survey, we estimate the logit and multinomial logit model. The paper employs instrumental variable technique to correct for potential endogeneity that arises when analyzing education and labor market outcomes. The results from both models show that being a woman reduces the chances of entering the labor market. We find that education yields positive effects in the labor market. On average, the difference between the marginal effect of education on employment probability between men and women is two percentage points, with the effect being higher for women. In the multinomial logit model, educated women are more likely to be employed in both the public sector and the informal sector, while in the private sector they are less likely to be employed. The implication of these findings is that policies should target education as a tool that can reduce gender differential in the labor market. This should be coupled with affirmative action that gives priority to women and minimizes preference for men in the labor market.