Understanding Low Average Returns to Education in Africa: The Role of Heterogeneity across Education Levels and the Importance of Political and Economic Reforms

Until very recently, the conventional wisdom was that the return to education was very high in Africa. However, some recent analysis point to low average returns to education in some African countries including Nigeria. Given these low returns to education, a relevant question is what causes low returns or what can cause changes in returns to education? In this paper, I examine the hypothesis that economic and political reforms can lead to increased returns to schooling using the case of Nigeria. Following the sudden death of military general Sanni Abacha, Nigeria moved to democracy in 1999, ending an over 15 years stretch of military rule. This move was followed by significant institutional and economic reforms, which provide an opportunity to examine the short term impact of reforms on returns to education. The average return to education is estimated using instrumental variables exploiting a quasi experiment in Nigeria. The results provide evidence that reforms implemented post democracy in Nigeria led to a 2.6% point increase in average returns to education. Furthermore, I find that the low average return to schooling in Nigeria reflects more the low returns at the primary and secondary levels.returns to education, wage reform, military, democratic reform

The Role of Information and Institutions in Understanding the Black-White Gap in Self-Employment

It has been well documented in the literature that ethnicity matters significantly in the determination of self-employment rates. In particular, African-American self-employment rates lag far behind rates for other racial groups. Similarly, the literature also provides evidence of the long lived nature of institutions and the link between institutions and decision making. After controlling for the appropriate factors that can lead to self-employment differentials, we provide an explanation for the self-employment gap that still exists between African-Americans and White Americans. We focus on the important role of repeated negative institutional shocks and how such shocks influence the development of an information matrix as well as the transmission of information across time and generations. We show that African-Americans who were less likely to be influenced by negative institutional shocks and the information stock created from these experiences, have similar self-employment rates to comparably situated White Americans.African-American, institutions, information, self-employment

The Racial Saving Gap Enigma: Unraveling the Role of Institutions

It has been well documented in the literature that ethnicity matters significantly in the determination of savings. In particular, African-American savings lag far behind that of other ethnic groups. Similarly, the literature also provides evidence of the long-lived nature of institutions and the link between institutions and culture. In this paper, we provide an explanation for the savings gap that still exists between African-Americans and White Americans even after accounting for appropriate factors that can lead to savings differentials. We initially provide evidence that the savings gap exists and persist after including several control variables in a regression analysis. We then provide evidence that the persistent gap can not be attributed solely to racial discrimination but can be explained by the response of culture to institutional scaffolding erected many years earlier. Using a novel within race decomposition we provide evidence that past institutions transmitted through culture can help to explain this persistent saving disparity.Savings gap, Institutions, Race, Culture, Institutional and Behavioral Economics, Political Economy, D14, D31, J15, J78, N30,

Black-White Gap in Self-Employment in the U.S.: Do Cohort and Within Race Differences Exist?

In this paper we ask three questions: First, is there evidence of a Black-White gap in self-employment between 1994-2002 and could the inclusion of the White immigrant population be driving this result? Second, do within race differences in self-employment exist among the U.S. born? Finally, do cohort differences in the Black-White self-employment gap exist among the U.S. born? These questions are based on some of the regression findings in our earlier paper focused on the role of information and institutions in understanding the Black-White gap in self-employment. We find that the Black-White self-employment gap is not driven by the existence of White immigrants in the data set. In addition, we find that within race and cohort differences exist in the Black-White self-employment gap. A subgroup of U.S. born African-Americans have a self-employment probability that is identical to that of U.S. born White-Americans. In addition, younger cohorts of African-Americans have a much smaller self-employment gap than do older African-Americans.self-employment, disparities, black-white gap

Conflict and its Impact on Educational Accumulation and Enrollment in Colombia: What We Can Learn from Recent IDPs

Forty years of low-intensity internal armed conflict has made Colombia home to the world's second largest population of Internally Displaced Persons (IDPs). The effect of being directly impacted by conflict on a child's educational accumulation and enrollment is of particular concern because of the critical role that education plays in increasing human capital and productivity. This paper explores the educational accumulation and enrollment gap created by being directly affected by conflict. First, we show that children living in municipality with high conflict have a gap in education enrollment and accumulation. However, this gap is much smaller than the attainment and enrollment gap for those directly affected by the conflict (IDPs). We estimate the education accumulation and enrollment gaps for IDPs in comparison to non-migrants and other migrants respectively. Our results suggest significant education accumulation and enrollment gaps for children of IDPs that widens to over half a year in secondary school. The disparity in effects when we focus on direct exposure to conflict versus living in a municipality with conflict suggests a need to be careful when using the latter to estimate the impact of conflict.educational attainment, school enrollment, Colombia, internal displacement, conflict

The Role of Race and Birth Place in Welfare Usage among Comparable Women: Evidence from the U.S.

There is evidence that women are more likely to live in poverty than men. Given the fact that the poor are more likely to use welfare, it becomes useful to consider welfare usage among women. A-priori welfare programs are set up in such a way that welfare usage should be based primarily on economic needs and health concerns. However, it is possible that an individual’s experiences could affect their perception and preferences for using government assistance. In this scenario, differences in welfare usage will exist for individuals with similar characteristics but different experiences. We explore this possibility among women and investigate if race/ethnicity and birthplace still have a role to play in the decision to use welfare even after controlling for income, health and other demographic factors like employment. We find that race does not matter for welfare usage among comparable women. In addition, we do not find any significant differences in welfare usage among women based on birthplace – suggesting that comparable naturalized and native born women share similar preference for welfare. The only exception is women born in U.S territories. Our results suggest that among comparable women, women born in U.S territories seem to be more inclined to welfare usage in comparison to U.S born White women.ethnicity, race, immigrants, women, welfare usage, black, welfare, birth place, immigrant status

Welfare Usage in the U.S.: Does Immigrant Birthplace and Immigration Status Matter?

The study of welfare participation in the U.S. prior to the 1996 welfare reform act and even afterward has focused on comparisons between native born and immigrant households. Analyses that have gone beyond this broad classification have focused on comparisons across race or with particular focus on particular groups like Hispanic immigrants. To the best of our knowledge, there is no study yet that tests for difference in welfare usage among immigrant groups and immigrant status. We do not expect welfare usage to differ among immigrant groups if we control for the factors that should predict welfare usage. Similarly, if immigration status does not prevent welfare usage for certain immigrants, then ceteris paribus, we do not expect welfare usage to differ among immigrant based on status. We investigate these possibilities by testing three related hypothesis using probability models. Our results suggest that birth place matters and the probability of welfare usage is not the same for all groups. We also find that for some birthplace groups, citizen and non-citizens differ with respect to welfare usage. Finally, we find that post welfare reform, the probability of being on welfare in comparison to U.S. born increased for all immigrant groups and these increases differed across groups. We provide possible explanations for our unexpected results.immigrants, welfare, welfare reform, immigrant status

Coming to America: Does Immigrant's Home Country Economic Status Impact the Probability of Self-Employment in the U.S.?

This paper examines the impact of home country economic status on immigrant self-employment probability in the U.S. We estimate a probability model and find that, consistent across race, immigrants from developed countries are more likely to be self-employed in the U.S than are immigrants from developing countries. This result is unexpected given previous research which suggests that immigrants from countries with high levels of self-employment tend to be more involved in self-employment in the U.S. Developing countries on average have higher self-employment rates than do developed countries but our research shows that immigrants from developing countries have similar or lower self-employment probabilities relative to native born White Americans, whereas immigrant from developed countries have significantly higher self-employment probabilities relative to native born White Americans. We provide two potential explanations for this result. First, immigrants from developed countries may indeed have more and better access to start-up capital from their country of origin. Second, institutional arrangements in the developed world may be similar across countries allowing immigrants from developed countries to have an informational advantage over immigrants from developing countries.self-employment, immigrant, home country, entrepreneurship

The Racial Saving Gap Enigma: Unraveling the Role of Institutions

It has been well documented in the literature that ethnicity matters significantly in the determination of savings. In particular, African-American savings lag far behind savings for other ethnic groups. Similarly, the literature also provides evidence of the long-lived nature of institutions and the link between institutions and culture. In this paper, we provide an explanation for the savings gap that still exists between African-Americans and White Americans even after accounting for appropriate factors that can lead to savings differentials. We initially provide evidence that the savings gap exists and persist after including several control variables in a regression analysis. We then provide evidence that the persistent gap can not be attributed solely to racial discrimination but can be explained by the response of culture to institutional scaffolding erected many years earlier. Using a novel within race decomposition we provide evidence that past institutions transmitted through culture can help to explain this persistent saving disparity.savings gap, institutions, race, culture

The conceptualisation of Employee Voice in Permacrisis: A UK Perspective

Research on the topic of employment relations often adopts analytical frameworks related mainly to the concept of ‘voice’. While originally defined as the effort to effect change by Albert Hirschman, the meaning and conceptualisations of the term ‘voice’ have evolved over the years. Later writers such as Freeman and Medoff describe the concept from the point of view of union monopoly of representation, i.e., union articulation of workers’ concern. In this chapter, we present a synthesis and overview of some of the early conceptualisations of employee voice and unionism in the United Kingdom. Our goal extends beyond simply sketching or cataloguing the historical analysis around voice, to using this analysis as an instrument for understanding the current state and projecting into the future of employee voice and unionism in the United Kingdom. The chapter reveals that the concept of voice has been significantly reinvented by modern-day scholars. The chapter will heavily depend on a review of extant literature. It would, however, be impossible to synthesise the entire literature on voice in this short chapter. Hence, there will be a significant focus on the United Kingdom experience and authors, howbeit, other authors based elsewhere may be selectively included. The study concludes that though employee voice is relevant today, in most cases it only serves the interest of management and where this is not the case management hardly pays any attention to it. The study revealed further that during permacrisis, there is little or no attempt on the part of the management to attention to or implement the demand expressed in employee voice