Advanced Search
MyIDEAS: Login to save this paper or follow this series

Understanding Low Average Returns to Education in Africa: The Role of Heterogeneity across Education Levels and the Importance of Political and Economic Reforms

Contents:

Author Info

  • Uwaifo Oyelere, Ruth

    ()
    (Emory University)

Abstract

Until very recently, the conventional wisdom was that the return to education was very high in Africa. However, some recent analysis point to low average returns to education in some African countries including Nigeria. Given these low returns to education, a relevant question is what causes low returns or what can cause changes in returns to education? In this paper, I examine the hypothesis that economic and political reforms can lead to increased returns to schooling using the case of Nigeria. Following the sudden death of military general Sanni Abacha, Nigeria moved to democracy in 1999, ending an over 15 years stretch of military rule. This move was followed by significant institutional and economic reforms, which provide an opportunity to examine the short term impact of reforms on returns to education. The average return to education is estimated using instrumental variables exploiting a quasi experiment in Nigeria. The results provide evidence that reforms implemented post democracy in Nigeria led to a 2.6% point increase in average returns to education. Furthermore, I find that the low average return to schooling in Nigeria reflects more the low returns at the primary and secondary levels.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://ftp.iza.org/dp3766.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3766.

as in new window
Length: 42 pages
Date of creation: Oct 2008
Date of revision:
Handle: RePEc:iza:izadps:dp3766

Contact details of provider:
Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org

Order Information:
Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Email:

Related research

Keywords: returns to education; wage reform; military; democratic reform;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Fleisher, Belton M. & Sabirianova, Klara & Wang, Xiaojun, 2005. "Returns to skills and the speed of reforms: Evidence from Central and Eastern Europe, China, and Russia," Journal of Comparative Economics, Elsevier, vol. 33(2), pages 351-370, June.
  2. Una Okonkwo Osili & Bridget Terry Long, 2007. "Does Female Schooling Reduce Fertility? Evidence from Nigeria," NBER Working Papers 13070, National Bureau of Economic Research, Inc.
  3. Paul Collier & Jan Willem Gunning, 1998. "Explaining African economic performance," Economics Series Working Papers, University of Oxford, Department of Economics WPS/1997-02.2, University of Oxford, Department of Economics.
  4. Daron Acemoglu & James Robinson, 1999. "Democratization or Repression?," Working papers, Massachusetts Institute of Technology (MIT), Department of Economics 99-27, Massachusetts Institute of Technology (MIT), Department of Economics.
  5. Acemoglu, Daron & Robinson, James A, 1998. "Why did the West Extend the Franchise? Democracy, Inequality and Growth in Historical Perspective," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1797, C.E.P.R. Discussion Papers.
  6. Gorodnichenko, Yuriy & Sabirianova Peter, Klara, 2005. "Returns to schooling in Russia and Ukraine: A semiparametric approach to cross-country comparative analysis," Journal of Comparative Economics, Elsevier, vol. 33(2), pages 324-350, June.
  7. Schultz, T. Paul, 1988. "Education investments and returns," Handbook of Development Economics, Elsevier, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 1, chapter 13, pages 543-630 Elsevier.
  8. Orley Ashenfelter & David Zimmerman, 1993. "Estimates of the Return to Schooling From Sibling Data: Fathers, Sons and Brothers," Working Papers, Princeton University, Department of Economics, Industrial Relations Section. 697, Princeton University, Department of Economics, Industrial Relations Section..
  9. Joshua Angrist & Alan Krueger, 1990. "Does Compulsory School Attendance Affect Schooling and Earnings?," Working Papers, Princeton University, Department of Economics, Industrial Relations Section. 653, Princeton University, Department of Economics, Industrial Relations Section..
  10. Alberto Abadie & David Drukker & Jane Leber Herr & Guido W. Imbens, 2004. "Implementing matching estimators for average treatment effects in Stata," Stata Journal, StataCorp LP, StataCorp LP, vol. 4(3), pages 290-311, September.
  11. Alberto Abadie & Guido W. Imbens, 2002. "Simple and Bias-Corrected Matching Estimators for Average Treatment Effects," NBER Technical Working Papers, National Bureau of Economic Research, Inc 0283, National Bureau of Economic Research, Inc.
  12. Ruth Uwaifo Oyelere, 2008. "Disparities in Labor Market Outcomes Across Geopolitical Regions in Nigeria. Fact or Fantasy?," Journal of African Development, African Finance and Economic Association, African Finance and Economic Association, vol. 10(1), pages 11-31.
  13. Gradstein. Mark & Milanovic, Branko, 2002. "Does Liberte = Egalite ? A survey of the empirical links between democracy and inequality with some evidence on the transition economies," Policy Research Working Paper Series, The World Bank 2875, The World Bank.
  14. Acemoglu, Daron & Robinson, James A, 1999. "A Theory of Political Transitions," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2277, C.E.P.R. Discussion Papers.
  15. Psacharopoulos, George, 1994. "Returns to investment in education: A global update," World Development, Elsevier, Elsevier, vol. 22(9), pages 1325-1343, September.
  16. Douglas Staiger & James H. Stock, 1994. "Instrumental Variables Regression with Weak Instruments," NBER Technical Working Papers, National Bureau of Economic Research, Inc 0151, National Bureau of Economic Research, Inc.
  17. Paul Bennell, 1996. "General versus vocational secondary education in developing countries: A review of the rates of return evidence," Journal of Development Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 33(2), pages 230-247.
  18. 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, Centre for the Study of African Economies (CSAE), Centre for the Study of African Economies (CSAE), vol. 13(02), pages ii95-ii148, December.
  19. Psacharopoulos, George & Patrinos, Harry Anthony, 2002. "Returns to investment in education : a further update," Policy Research Working Paper Series, The World Bank 2881, The World Bank.
  20. David Card, 2000. "Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems," NBER Working Papers 7769, National Bureau of Economic Research, Inc.
  21. Rigobon, Roberto & Rodrik, Dani, 2004. "Rule of Law, Democracy, Openness and Income: Estimating the Interrelationships," CEPR Discussion Papers, C.E.P.R. Discussion Papers 4653, C.E.P.R. Discussion Papers.
  22. Uwaifo Oyelere, Ruth, 2007. "Within and Between Gender Disparities in Income and Education Benefits from Democracy," IZA Discussion Papers 3221, Institute for the Study of Labor (IZA).
  23. 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, Elsevier, vol. 51(2), pages 267-290, December.
  24. Uwaifo Oyelere, Ruth, 2010. "Africa's education enigma? The Nigerian story," Journal of Development Economics, Elsevier, Elsevier, vol. 91(1), pages 128-139, January.
  25. Glewwe, P., 1991. "Schooling, skills, and the returns to government investment in education: an exloration using data from Ghana," Papers, World Bank - Living Standards Measurement 76, World Bank - Living Standards Measurement.
  26. Baland, Jean-Marie & Francois, Patrick, 2000. "Rent-seeking and resource booms," Journal of Development Economics, Elsevier, Elsevier, vol. 61(2), pages 527-542, April.
  27. Daron Acemoglu & Simon Johnson & James Robinson, 2004. "Institutions As The Fundamental Cause Of Long-Run Growth," DOCUMENTOS CEDE, UNIVERSIDAD DE LOS ANDES-CEDE 002889, UNIVERSIDAD DE LOS ANDES-CEDE.
  28. Angrist, Joshua D, 1995. "The Economic Returns to Schooling in the West Bank and Gaza Strip," American Economic Review, American Economic Association, American Economic Association, vol. 85(5), pages 1065-87, December.
  29. Daoud, Yousef, 2005. "Gender gap in returns to schooling in Palestine," Economics of Education Review, Elsevier, Elsevier, vol. 24(6), pages 633-649, December.
  30. Minier, Jenny A, 1998. " Democracy and Growth: Alternative Approaches," Journal of Economic Growth, Springer, Springer, vol. 3(3), pages 241-66, September.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Aysit Tansel & Yousef Daoud, 2011. "Comparative Essay on Returns to Education in Palestine and Turkey," Koç University-TUSIAD Economic Research Forum Working Papers, Koc University-TUSIAD Economic Research Forum 1118, Koc University-TUSIAD Economic Research Forum.
  2. Gonzalez, Naihobe & Oyelere, Ruth Uwaifo, 2011. "Are returns to education on the decline in Venezuela and does Mission Sucre have a role to play?," Economics of Education Review, Elsevier, Elsevier, vol. 30(6), pages 1348-1369.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp3766. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.