Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/35369 
Year of Publication: 
2008
Series/Report no.: 
IZA Discussion Papers No. 3766
Publisher: 
Institute for the Study of Labor (IZA), Bonn
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.
Subjects: 
Returns to education
wage reform
military
democratic reform
JEL: 
J08
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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