Tanzanian Economic Review, Vol. 13 No. 1, June, 2023: 85–103 ©School of Economics, University of Dar es Salaam, 2023  https://doi.org/10.56279/ter.v13i1.91 An Empirical Investigation of the Effect of Manager’s Level of Education on Labour Productivity In the Manufacturing Sector in Uganda: 2006–2013 Martin O. Iremaut, * Michael O. Ndanshau ‡ & Stephen L. Kirama § Abstract This paper investigates the effect of education of firm managers on labour productivity in Uganda’s manufacturing sector using enterprise survey data. Like in many Sub- Saharan economies, Uganda is grappling with labour productivity associated with deficiencies and mismatch in skills, which limit the adaptation of new production technologies. The human capital theory (HCT) and the endogenous growth theory (EGT) underpinned this investigation. On the basis of a Cobb-Douglas function we estimated a labour productivity equation. The paper found that attainment of higher levels of education by firm managers improved labour productivity, and mean productivity of individual workers at firm level. The strong linkage between managers’ education and labour productivity implies that the government should focus on policies that improve higher education. Keywords: human capital theory, endogenous theory, Cobb-Douglas function, firm managers, level of education, labour productivity, skill deficiency JEL Classification: J24 1. Introduction Education affects productivity through both workers and managers’ levels of education (Barro & Lee, 2013; Okumu & Mwanjje, 2019; DfE, 2021). The human capital theory (HTC) suggests that the level of education is directly proportional to labour productivity. Therefore, through education more scarce resources should be directed to the development of skills that improves labour productivity. Granted, planners can use education effectively to address low labour productivity, among others, in the manufacturing sector. The level of investments in education determines the levels of skills and human capital accumulation (Schultz, 1961; Barro & Lee, 2013; UNESCO IIEP , 2022), and consequently labour productivity. The objective of this paper is to investigate the effects of managers’ levels of education on labour productivity in manufacturing firms in Uganda. In Uganda, like in many Sub-Saharan African (SSA) economies, the manufacturing subsector is grappling with labour productivity associated with skill deficiencies and mismatch, which limit abilities to marshal production resources and the adaptation of new technologies. The subsector lacks indigenous capability for technology and * School of Economics, University of Dar es Salaam: iremautmo@gmail.com (Corresponding author) ‡ School of Economics, University of Dar es Salaam: michaelndanshau@gmail.com § School of Economics, University of Dar es Salaam: ngareni73@gmail.com