Evidence of Returns to Schooling in Africa from Household Surveys: Monitoring and Restructuring the Market for Education

Wage differentials by education of men and women are examined from several recent African household surveys to document empirical regularities in private wage returns to schooling. In contrast to the common description which states that returns are highest at primary school levels and decrease at secondary and post-secondary levels, these surveys imply private returns in six countries are highest at the secondary and post-secondary levels and generally as high for women as they are for men, though women are less likely to enrol at these higher levels of schooling, with the exception of South Africa. Thus, the large public subsidies for post-secondary education in Africa do not appear needed to motivate students to enrol and those who have in the past enrolled in these levels of education are shown to have been drawn disproportionately from the most educated families. More efficient management of higher education in Africa could be encouraged, if the children of well-educated parents were to pay the public costs of their schooling and these tuition revenues were used to expand higher education and finance fellowships for only the children of the poor, who on average face relatively low returns in Africa on their basic education and have the greatest difficulty borrowing to finance their attendance in school.