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

42 Pages Posted: 19 Oct 2008

See all articles by Ruth Uwaifo Oyelere

Ruth Uwaifo Oyelere

Morehouse College; IZA Institute of Labor Economics

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.

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

JEL Classification: J08, O12, O15, P5

Suggested Citation

Uwaifo Oyelere, Ruth, 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 Paper No. 3766, Available at SSRN: https://ssrn.com/abstract=1286724 or http://dx.doi.org/10.2139/ssrn.1286724

Ruth Uwaifo Oyelere (Contact Author)

Morehouse College ( email )

Department of Economics
Atlanta, GA 30332
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
66
Abstract Views
652
rank
457,121
PlumX Metrics