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Africa’s Education Enigma? The Nigerian Story

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Author Info
Ruth Uwaifo Oyelere () (Georgia Institute of Technology and IZA)

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Abstract

In the last two decades, the social and economic benefits of formal education in Sub-Saharan Africa have been debated. Anecdotal evidence points to low returns to education in Africa. Unfortunately, there is limited econometric evidence to support these claims at the micro level. In this study, I focus on Nigeria a country that holds 1/5 of Africa’s population. I use instruments based on the exogenous timing of the implementation and withdrawal of free primary education across regions in this country to consistently estimate the returns to education in the late 1990s. The results show the average returns to education are particularly low in the 90s, in contrast to conventional wisdom for developing countries (2.8% for every extra year of schooling between 1997 and 1999). Surprisingly, I find no significant differences between OLS and IV estimates of returns to education when necessary controls are included in the wage equation. The low returns to education results shed new light on both the changes in demand for education in Nigeria and the increased emigration rates from African countries that characterized the 90s.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3097.

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Length: 42 pages
Date of creation: Oct 2007
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Handle: RePEc:iza:izadps:dp3097

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Related research
Keywords: human capital; instrumental variables; Nigeria; returns to education; schooling;

Find related papers by JEL classification:
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
I29 - Health, Education, and Welfare - - Education - - - Other
O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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References listed on IDEAS
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  2. William Easterly, 2002. "The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262550423.
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  7. Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, vol. 65(3), pages 557-586, May.
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  8. T. Paul Schultz, 2004. "Evidence of Returns to Schooling in Africa from Household Surveys: Monitoring and Restructuring the Market for Education," Journal of African Economies, Oxford University Press, vol. 13(02), pages ii95-ii14, December.
    Other versions:
  9. Mwabu, Germano & Schultz, T Paul, 1996. "Education Returns across Quantiles of the Wage Function: Alternative Explanations for Returns to Education by Race in South Africa," American Economic Review, American Economic Association, vol. 86(2), pages 335-39, May. [Downloadable!] (restricted)
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  10. Harmon, C & Ian Walker, 1995. "Estimates of the economic return to schooling for the UK," IFS Working Papers W95/12, Institute for Fiscal Studies.
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    Other versions:
  12. Gérard Lassibille & Jee-Peng Tan, 2005. "The Returns to Education in Rwanda," Journal of African Economies, Oxford University Press, vol. 14(1), pages 92-116, March.
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  14. Angrist, Joshua D., 1997. "Conditional independence in sample selection models," Economics Letters, Elsevier, vol. 54(2), pages 103-112, February. [Downloadable!] (restricted)
    Other versions:
  15. Glewwe, Paul, 1996. "The relevance of standard estimates of rates of return to schooling for education policy: A critical assessment," Journal of Development Economics, Elsevier, vol. 51(2), pages 267-290, December. [Downloadable!] (restricted)
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This page was last updated on 2009-11-30.

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