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CEA 2006 - Rendement Privé de l'Education en Afrique


Much emphasis is placed on the need to increase the level of human capital, through improved education access, to sustain high economic growth in Africa. This emphasis has given rise to renewed interest in obtaining estimates of private rates of returns to education (RORE) in Africa so as to understand the motivations and constraints which individuals face in their education cost-benefit analysis and thus be in a position to inform policy makers. While there is a large empirical literature on analysis of rates of returns to education, until recently, most analysis for Africa relied on non-representative surveys. As a result, their findings cannot be generalized to the whole population. This paper addresses that issue and contributes to the literature on returns to education in Africa by using the 2001 Cameroon household survey to estimate private RORE. We compare RORE for those who attended an education cycle with those who have graduated from that education cycle. We also allow individuals to be endogenously selected into the informal sector, the formal private sector or in the public sector. We find strongly convex and high RORE in all sectors of employment. Interestingly those who did not graduate from primary school earn no returns compared to those who never attended school. As expected, those who graduated from an education cycle earn statistically significant and higher returns than those who have not. We also find higher returns to having attended vocational school when working in the informal sector than elsewhere. As our estimates are robust to using population-weighted data we can therefore argue that they hold for the whole population of Cameroon. Our results militate in favor of an integrated education approach whereby emphasis is placed (i) not only on school attendance but on graduation so that more students can reach and complete university, and (ii) a scaling-up of the education budget at all levels for the number and quality of African university graduates to increase.

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