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Abstract

In the last two decades, the social and economic benefits of formal education in sub-Saharan Africa has been debated. Anecdotal evidence points to low and time varying returns to education in Africa. Unfortunately, there has been little econometric evidence to support these claims at the micro level. Here I focus on Nigeria, a country that holds 1/5 of Africa's population, and use instruments based on the exogenous timing of the implementation and withdrawal of free primary education across regions in this country to precisely estimate the returns to education in the late 1990s. In addition, claims of time differences in returns are investigated. The results show that the average returns to education are particularly low in the 90s, in contrast to conventional wisdom for developing countries (3.6 % for every extra year of schooling in 1998). In addition, there have been significant changes in returns to education for head of households over short time periods. These 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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