{ "docId": "019dd923-5de0-76bd-a168-a3737f540343", "docSlug": "d791b7fba79d000b", "documentTitle": "Education: Mega Trends and Opportunities in Africa", "authorId": "LEK", "authorName": "Center for Global Development", "documentKindSlug": "consulting-deck", "documentKindLabel": "Consulting deck", "sourceTypeSlug": "strategy_consulting", "sourceTypeLabel": "Strategy consulting", "presentationDate": null, "orientation": "portrait", "aspectRatio": 0.773, "pageNumber": 56, "pageCount": 101, "prevPage": 55, "nextPage": 57, "slideType": "appendix_methodology", "function": "appendix", "density": "overcrowded", "nDataPoints": 10, "notes": "Contains academic citations and methodological discussion on Mincerian regressions and wage-worker bias.", "elementsJson": [ "paragraph", "footnote" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-5de0-76bd-a168-a3737f540343/56", "deckHref": "/decks/019dd923-5de0-76bd-a168-a3737f540343", "deckJsonHref": "/decks/019dd923-5de0-76bd-a168-a3737f540343.json", "deckAnchorHref": "/decks/019dd923-5de0-76bd-a168-a3737f540343#slide-56", "components": [ { "bbox": null, "kind": "callout", "text": "These estimates suggest significant returns to an additional year of education, including among informal sector workers.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd952-2e33-71c7-81ae-2c9124ed2623", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "metric", "text": "Returns to education: 15.7%", "attrs": null, "subkind": "primary", "toolName": "Quantification", "toolSlug": "quantification", "confidence": null, "componentId": "019dd952-2e33-71c7-81ae-310ee6faaf20", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.06, "w": 0.78, "x": 0.11, "y": 0.8 }, "kind": "paragraph", "text": "Much recent research studies how to improve the quality of education (World Bank, 2018a). What are the returns to quality? There is much less evidence on this in the region, although evidence from high-income countries does show returns to higher quality education (Card and Krueger, 1992). Most studies on the quality", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "22218c69-04f6-427f-af53-6b0d43700202", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.35, "w": 0.78, "x": 0.11, "y": 0.5 }, "kind": "paragraph", "text": "To expand beyond wage earners, Lehmann-Uschner (2020) estimates the returns to education for self-employed market vendors in rural western Uganda, finding a return of 7 percent to formal education. Kavuma et al. (2015) impute wages for both the self-employed and the wage earners in Uganda, and estimate a return to schooling of 16 percent using a national household survey. Jones et al. (2018) use expenditures per contributing family member in the household rather than wages over three survey rounds in Mozambique and find a return of 10.5 percent points, remarkably similar to the Africa-wide estimate in Psacharopoulos and Patrinos (2018). As access to lower levels of education has risen, they find falling returns, so that “workers today must accumulate more years of schooling to achieve the same expected return as in the past.” This is consistent with recent findings in the Democratic Republic of the Congo (Kuepié and Nordman, 2016) and. While there is some variation across estimates, that is to be expected across different countries, time periods, and samples. Furthermore, Serneels et al. (2016) show using Tanzanian data that estimates vary substantively and significantly (between 6 and 14 percentage points) depending on how the survey measuring wages and education is designed. A few recent papers have explored returns with respect to different outcomes. Woldehanna and Araya (2017) use longitudinal data in Ethiopia to show that access to early child education increases the odds of completing secondary school by a quarter. These estimates suggest significant returns to an additional year of education, including among informal sector workers.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "6744c5bb-8f9a-4f69-bc04-2e6d97b65c95", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.2, "w": 0.78, "x": 0.11, "y": 0.33 }, "kind": "paragraph", "text": "Recent studies have sought to address each of these challenges in individual countries. In order to overcome self-selection issues, Samahiya (2020) used the compulsory education policy from South Africa in 1996 as a source of exogenous variation in schooling attainment and finds returns of 15.7 percent in monthly earnings, significantly higher than those from simple Mincerian estimates. In the north African country of Tunisia, Pellicer (2018) exploits education policy changes to estimate returns (specifically on the likelihood of public sector employment), showing that they have decreased over time but remain large, with the youngest cohorts seeing a 4 percentage point rise in public sector employment with an additional year of education.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "7ee0a2a3-452e-4efe-ab3d-2c36e85f3ce6", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.25, "w": 0.78, "x": 0.11, "y": 0.13 }, "kind": "paragraph", "text": "These two broad, cross-regional analyses—Psacharopoulos and Patrinos (2018) and Peet et al. (2015) – find estimates of returns to education in Africa between 9 and 11 percent. This type of estimate of the rate of return to schooling in Africa presents at least two challenges. First, Mincerian regressions typically do not account for the fact that characteristics that are often unobserved to the econometrician—such as innate ability, income level in childhood, social networks, parental motivation, or liquidity constraints—may affect both an individual’s years of schooling and influence her adult earnings, limiting the causal interpretation of these estimates. Second, most estimates of the returns to education only include wage workers, which poses a particular problem in Sub-Saharan Africa, where fewer than 24 percent of workers receive wages or salaries. In five countries across the region (Burundi, Central African Republic, Chad, Guinea, and Niger), that number is less than 10 percent (Appendix Figure 1).", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "8ae0a41f-6a07-4968-bdb4-17c87cbe03e0", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.78, "x": 0.11, "y": 0.87 }, "kind": "source-note", "text": "20 The World Development Indicators report 24 percent for 2019 and 20 percent in 2000 (with intervening years between those two numbers). Sandefur (2019) highlighted this issue of low proportions of wage workers and the ensuing challenge of interpreting returns.", "attrs": { "numbered": true }, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "afb2a067-db2f-47de-bdc3-05e6bbd6f406", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.6, "x": 0.11, "y": 0.11 }, "kind": "title", "text": "Appendix Section 1: Returns to education in Africa - An overview", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "cd8ec04e-b214-4cad-9c54-e5fba3e95c15", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [], "arcBeats": [ { "to": 74, "from": 25, "beatId": "327d2aca-acea-47df-b8ae-e3ebb75d2d83", "arcName": "The Consultant's Gambit", "arcSlug": "consultants-gambit", "beatName": "Evidence & Proof", "beatSlug": "consultants-gambit-evidence-proof", "evidence": "The document's presentation of research findings and data on education trends in Africa.", "position": 2, "confidence": 0.8, "parentBeatName": "Evidence", "parentBeatSlug": "evidence" } ], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }