For GCC workers, education doesn't pay

Dubai: UAE and GCC workers get only a 5.1 per cent increase in earnings for every year they invest in education, giving them little incentive to pursue higher, according to a study presented at the cost of labour workshop in Dubai on Tuesday.

The paper was presented by Dr Rosalia Vazquez-Alvarez during a session on micro-analysis of wages and factors affecting wages in the UAE.

The study found that workers from the MENA region get a 13 per cent return on their earnings after investing in education, Westerners get 9.3 per cent, and other nationalities (mainly including Bangladeshis, Indians and Filipinos), get a 12.7 per cent return.

“It doesn’t matter what your educational background or experience is, it doesn’t seem to pay, and that has an effect on your productivity at the end of the day,” she said.

In the UAE, an uneducated worker earns on average Dh10 per hour, while a PhD-holder earns Dh150 per hour whatever their nationality. Only 36 per cent of the population is educated above secondary level, she added.

The study revealed glaring wage differences between expatriates and Emiratis, men and women, and experience levels.

A system of wage premiums for Emiratis must be introduced to increase incentives for education, emphasized the professor. This encourages the young generation to invest in education and earn higher pay accordingly.
Alvarez used the UAE Labour Force Survey released in 2009, to study the micro-structure of wages in the country to get information on the work force characteristics, to estimate wage profiles, as well as wage gaps between groups of workers.

The study asked if re-shaping the sponsorship system could provide better incentives to increase expatriate productivity levels.