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Disparities in Labor Market Outcomes Across Geopolitical Regions in Nigeria. Fact or Fantasy?

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  • Ruth Uwaifo Oyelere

    () (Georgia Institute of Technology)

Abstract

Questions focused on understanding Africa's lack of growth are not new in economics research. Ethnic fragmentation is one of the many reasons suggested for lack of growth of many developing countries especially in Africa. This is because many countries that are ethnically fragmentized find it difficult agreeing on societal goals and instead, focus on achieving dominance in the political arena of the country. These actions usually lead to: ethnic conflict, corruption, instability and other factors that hamper growth in the long-run. Nigeria is no stranger to the scenario described above. The basis of most ethnic and regional conflicts is claims of the marginalization of particular groups. Documented and anecdotal evidence of marked differences in basic economic and social indicators are usually the starting point for these assertions. However, general perception and beliefs play a role in solidifying these claims. In this paper, evidence of labor market disparities in Nigeria is sought first using descriptive analysis of the data. Subsequently, I test the null hypothesis that there are no significant differences in labor market outcomes across geopolitical regions using econometric techniques. By means of an instrument first suggested by Osilli and Long (2003) but constructed similarly to Uwaifo (2006), I estimate the returns to education using two stage least squares. This instrument is based on the exogenous implementation and withdrawal of free education across regions and states in Nigeria over time. I derive estimates for both Northern and Southern Nigeria.

Suggested Citation

  • 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, vol. 10(1), pages 11-31.
  • Handle: RePEc:afe:journl:v:10:y:2008:i:1:p:11-31
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    References listed on IDEAS

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    1. Esther Duflo, 2001. "Schooling and Labor Market Consequences of School Construction in Indonesia: Evidence from an Unusual Policy Experiment," American Economic Review, American Economic Association, vol. 91(4), pages 795-813, September.
    2. Joshua D. Angrist & Alan B. Keueger, 1991. "Does Compulsory School Attendance Affect Schooling and Earnings?," The Quarterly Journal of Economics, Oxford University Press, vol. 106(4), pages 979-1014.
    3. Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, vol. 65(3), pages 557-586, May.
    4. Card, David, 2001. "Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems," Econometrica, Econometric Society, vol. 69(5), pages 1127-1160, September.
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    Cited by:

    1. Uwaifo Oyelere, Ruth, 2008. "Understanding Low Average Returns to Education in Africa: The Role of Heterogeneity across Education Levels and the Importance of Political and Economic Reforms," IZA Discussion Papers 3766, Institute for the Study of Labor (IZA).
    2. Ogundari, Kolawole, 2012. "Returns to Education Revisited and Effects of Education on Household Welfare in Nigeria," 2012 Conference, August 31, 2012, Nelson, New Zealand 136051, New Zealand Agricultural and Resource Economics Society.

    More about this item

    Keywords

    Nigeria; ethnic fragmentation; market disparities; geopolitics; school enrollment;

    JEL classification:

    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies
    • I0 - Health, Education, and Welfare - - General
    • J70 - Labor and Demographic Economics - - Labor Discrimination - - - General
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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