Regional Disparities in Private Returns to Education: Evidence from Nigeria

Abstract

This paper analyses a regional variation in returns to education in Nigeria. The paper draws on the latest national survey data in the country- the Nigeria Living Standards Measurement Survey (LSMS), to estimate the private returns to the different levels of education across the two regions i.e. the Northern and the Southern region of the country. The results confirm that not only the two regions differ in the level of educational attainment, but also the private returns to education varies sharply across the regions. The results demonstrate, in line with the theoretical literature, that education premium increases with level of education, and tertiary education gives the highest private returns to education in Nigeria. Private returns at all levels of education are lower in the Northern region. We interpret the regional heterogeneity in the education premium as the evidence of a malfunctioning labour market in the country.

Key words: Private return, educational attainment, inequality, regional disparity.