The second objective of the study was to establish the lifetime earnings based on the levels of Technical Education among skilled technical workers in the manufacturing industries in Thika, Kenya. Besides, the hypothesis was used that stated:
HO2: There is no significant difference between lifetime earnings accruing to an artisan, a craftsman, and a technician and a technologist in manufacturing industries in Thika, Kenya.
The responses to determine whether there was or there was no significant difference between lifetime earnings accruing were analyzed using descriptive statistics which included mainly the mean and standard deviation, minimum and maximum. Table 4.5 shows the earnings in monetary value of the four categories of TE levels namely the grade tests, certificate, diploma and high diploma. The earnings included their gross salaries and any other forms of income resulting from the use of their technical skills.
Average annual income was used as a proxy for lifetime earnings. According to Psacharopolous at al., (1985) and Becker, (1994) annual wage maybe a suitable proxy under the assumption that wages remain constant across time or grow at the same rate across the level of TE. Table 4.5 shows the mean,
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standard deviation and range of annual income after taxes across the levels of TE. The reason why income was taxed is to arrive at the individual earnings. Tax belongs to the government (society).
Table 4.5
Lifetime Earnings across Levels of TE in Kenya Shillings
No. Mean Std Dev Min Max
Grade Test 36 11,585,009 4,363,580 3,600,000 20,038,636 Certificate 38 12,183,550 3,837,299 4,450,224 20,530,036 Diploma 100 13,384,466 5,495,643 2,055,244 28,116,414 Higher diploma 41 14,072,604 9,904,868 3,860,976 44,741,528 Source: (Respondents)
Table 4.5 shows that on average, the lifetime earnings for grade test, certificate, diploma and higher diploma levels of TE was: Grade test level of TE had Ksh. 11, 585,009($US 144 812), certificate level- Ksh 12, 183,550 ($US 152 294), diploma level - Ksh 13,384,446 ($US 167 305) and higher diploma levels -Ksh 14,072,604 ($US 175 907).
Table 4.5 also shows that there is an increase in lifetime earnings with every level of TE. The table shows that average annual income is increasing with the level of TE. Higher diploma had the highest lifetime earnings while grade test had the lowest. Visibly, the range is approximately Ksh 2,487 595 which is equivalent to 21.5 percent. However, at the maximum, higher diploma is twice as much as that of a grade test, while the range is Ksh 24,702 892. This represents 123.3 percent difference.
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The standard deviation for grade tests, craftsman‟s‟ and higher diplomas annual income after taxes is fairly small compared to the mean showing that the estimated average annual income after taxes is representative of the population. The standard deviation of diploma technician was fairly large which implies that there is wide spread of technician‟s income. This is attributed to the diverse nature of diploma courses and earnings.
Annual wages after taxes were computed using the graduated tax rate structure applied in by Kenya Revenue Authority (KRA, 2013) to arrive at lifetime earnings. Additionally, the study assumed that a technical worker will be in employment until the age of 60 years. In this regard, to estimate the lifetime earnings, the difference between 60 years and the current number of years of the technical skilled worker was used. This difference was used in projecting the life time earnings.
To test whether the level of TE and lifetime earnings are statistically significant or not, Analysis of Variance (ANOVA) was used to test the hypothesis at 5 percent level of significance, . Table 4.6 shows the ANOVA results.
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Analysis of Variance: Lifetime Earnings by Level of TE
Source SS df MS F Prob > F --- Between groups 5.7710e+12 3 1.9237e+12 11.59 0.0000 Within groups 3.221e+13 194 1.6604e+11
--- Total 3.7983e+13 197 1.9281e+11
Bartlett's test for equal variances: chi2 (3) = 79.8683 Prob>chi2 = 0.000___ Source: Author
The results in table 4.6 show that F-statistics was 11.59 with a p-value of 0.000 which was less than 0.05. Therefore, at 5 percent level of significance, the null hypothesis was rejected. This means that there is a significant positive difference between lifetime earnings across different levels of TE.
In this regards, the results support the assertion that education has a significant positive relationship with lifetime earnings as respondents with higher levels of TE make more income compared to those with lower levels of TE. However, it is important to note that this inference does not take into account increase in productivity due to experience gained in the workplace.
These findings are in agreement with the study done by Psacharopoulos et al. (1985) which showed a strong relationship between earnings and education levels throughout the world, from developed and in developing countries. The study found out that the average lifetime earnings of educated workers are higher than the average earnings of illiterate workers, or those with lower levels of education. Based on the United Kingdom data, a study showed that
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individuals with VET qualifications receive higher wages than those without post school qualifications. Especially, for early school leavers though there are some exceptions showing little labour market value of certain VET qualifications (Kathrin, 2008). Kamenyi, Manda & Mwabu, (2002) also found out that there is a positive relationship between earnings and level of education. This study finding shows that there is positive relationship between earnings and levels of TE. This also agrees with the human capital theory which says thatearnings increase with additional schooling.