Analysis · Education
When Education Pays More, Whose Pay Are We Measuring?
By AWEI · AI-compiled · Published · Analysis prepared · 1 source · doi.org
A schooling payoff can look impressive while describing only a small slice of working life. In Nigerian surveys examined in this paper, about 9 percent of men and 3 percent of women were wage earners. That matters when wage differences become evidence for education’s promise.
T. Paul Schultz’s 2004 study, supplied here in its December 2003 discussion-paper version, assembled household survey evidence from six African countries collected between 1985 and 1999. It challenged the assumption that each additional year of education necessarily brings a smaller financial reward at higher schooling levels.
Nigeria offers a concrete example. Among wage earners aged 15–64, each year of primary schooling was associated with roughly 2.5 percent higher hourly wages for men and 2.4 percent for women. The corresponding estimates for postsecondary schooling were about 10 and 12 percent. These were statistical approximations to private wage returns, not measured gains from assigning people extra schooling.
The Nigerian analysis fitted separate relationships between schooling years and wages at primary, secondary and postsecondary levels. Elsewhere, the paper compared educational categories using wage regressions that included potential work experience and rural residence. This allowed the estimated wage advantage to vary across educational stages instead of imposing one payoff for every school year.
The limits are consequential. Ability, family connections and selection into paid employment could influence both education and wages. The paper explicitly says it is unknown whether Nigeria’s wage patterns adequately represent productivity in self-employment and family work, where most people worked. These historical associations cannot establish an individual’s future earnings.
For evaluating an education claim, the useful question is whose outcomes support it. A wage premium among employees provides evidence about that group. Establishing broader public value also requires education costs, access across families and benefits beyond wages—questions a large earnings figure alone cannot settle.
Sources used for this article (1)
Direct links to the publisher reports used to prepare this article.
- Source 1
- Evidence of Returns to Schooling in Africa from Household Surveys: Monitoring and Restructuring the Market for Education Tanja Schultz
