Micro Economics

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Private returns to higher education in Nigeria
(AERC, 2004-03-03) O.B. Okuwa
The idea of education as a capital good is rooted in the concept of “human capital”, which attaches a high premium to human skills as a factor of production in the development process. Education is known to be an important determinant of earnings in market economies. The higher an individual’s educational attainment, the higher that individual’s expected starting salary and the steeper the rise in earning capacity over time, especially during the early working years. This study investigates the variation in the rate of return to different levels of education. The study endeavours to determine the relationship between years of schooling and earnings (rate of return) in Nigeria. The effect of the amount of time in the labour force on earnings is also examined and an attempt made to highlight and calculate the private rates of return to graduates of higher educational institutions according to sectors of the economy and sex of the graduate. The descriptive statistics and ordinary least squares (OLS) estimation results reveal that the mean monthly earnings of workers increase with more years of schooling. The private rate of returns is low for graduates of colleges of education. It is higher for polytechnic graduates and higher still for university graduates. Furthermore, the mean earnings increase with higher years of labour market experience. Thus, the higher the level of education, the higher the rate of return to the individual. Efforts should be made to improve the quality and investment in this level of education by encouraging private individuals to invest in and pay for higher education.
Private Returns to Education in Ghana: Implications for Investments in Schooling and Migration
(AERC, 2008-01-07) Harry A. Sackey
This study examines private returns to schooling in Ghana over a seven-year period, and the implications for school investments and migration. Using data from the 1992 and 1999 Ghana living standards surveys and ordinary least squares technique, we find that the private returns to schooling at higher levels of education have increased for both female and male workers. For female workers, the return to an additional year of secondary schooling increased from 7.3% in 1992 to 12.3% in 1999. In the case of tertiary education, the change is from 11.4% in 1992 to 18.4% in 1999. For male workers the return to an additional year of secondary education decreased from about 7% to 6%, while the return to tertiary education increased from about 13% to 19%. Generally, the rising rates of return at higher school levels have coincided with a similar trend in school attendance rates for female and male children. The spatial analysis implies a rural-urban gap in the returns to an additional year of tertiary education. Linking these results to migration, the data show a relatively low incidence of rural-to-urban migration, notwithstanding relatively higher earnings in urban areas. To sustain the gains realized in educational attainment, lingering issues of gender equity need to be addressed by policy makers so that females are not left behind in the intergenerational race for improvements in quality of life.
Determinants of Access to Education in Cameroon
(AERC, 2014-01) Ndeffo, Luc Nembot; Réné, Tagne Kuelah Jean; Marienne, Makoudem Téné
regions of Cameroon. The target is to demonstrate, from the ECAM III Census data of 2007, the influence of monetary and non-monetary variables on access to primary and secondary education according to the sex of children, on the one hand, and the sociodemographic characteristics of the households, on the other. The main results show that the influence of monetary and non-monetary variables on access to education varies with region; sex of children; and the residence of households. Thus, the northern regions are less schooled than the southern ones. Marginalization of girls, to the benefit of boys, is very pronounced in the northern regions. Children from female-headed families have more chances of schooling than those from male-headed households. From the results, we get policy recommendations, especially public awareness campaigns in favour of the schooling of girls, in particular in the northern regions; more training, especially in rural areas; and the construction of boarding schools in regions with low population densities.
Dropping Out of School in the Course of the Year in Benin: A Micro-econometric Analysis
(AERC, 2014-05) Senou, Barthélemy Mahugnon
The important role of education in economic growth has long been recognized in ecomonic literature. The aim of this study is to analyse the phenomenon of dropping out of primary school in the course of the year in Benin by identifying its causes. The study used individual data about schoolchildren and classes, which enabled a close examination of the causes of each individual case of dropping out of school. These data were complemented with interviews with stakeholders in the education system in Benin, especially the schoolchildren’s parents. With a multinomial logit model, we estimated the probability that the schoolchild would be found in one of the three situations which are “to attend school regularly”, “to take to absenteeism”, and “to abandon school altogether”. The results obtained show that variables such as the level of health, stundent’s doing activities outside of school hours, level of household, the quality of education and teachers' absenteeism are determinants of dropping out during the year, and that the phenomenon of dropping out is more pronounced among girls compared to boys. In view of these results, policy elements have been formulated ito slow the phenomenon of dropping out.
Analysis of the Cost-Efficiency of Microfinance Institutions in the West African Economic Monetary Union Area
(African Economic Research consortium, 2016-09-30) Togba, Leadaut Edith Prisca
The cost-efficiency of microfinance institutions (MFIs) has emerged as an issue crucial to their survival and the continuity of their services. The present study uses the stochastic frontier method to analyse the levels and determinants of cost-efficiency of a sample of microfinance institutions operating from the West African Economic and Monetary Union (WAEMU) area. For the 2000–2008 period, these MFIs were found to have functioned in an ineffective way in terms of minimizing their costs. Factors influencing cost-efficiency include the age and type of MFI. The study’s results also reveal that the number of female borrowers, the MFI’s financial performance, level of capitalization, geographical location, and size were explanatory factors for the cost-efficiency of the MFIs studied.
Sustainability of Microfinance Institutions in Togo
(African Economic Research consortium, 2016-10-30) Kodjo, Abalo
For several years now, microfinance has become an important tool in the fight against poverty. That is why this study sought to analyse the sustainability and success of the microfinance institutions (MFIs) in Togo, and to identify explanatory factors for this sustainability and success. The study is based on data obtained from 63 MFIs,and covering the period from 2002 to 2008. It used two indicators to measure MFI financial sustainability: the operational self-sufficiency (OSS) and the subsidy-dependence index (SDI). It found that, overall, the MFIs studied were not financially high-performing and still depended on subsidies: their OSS was, on average, below acceptable standards. Several factors were found to be statistically significant in terms of explaining the variation in those MFIs’ performance. Among them are the MFIs’ number of beneficiaries, the number of years they have been in business, their labour productivity, observance of prudential rules, and the existence of a relationship between the MFIs and banks.
Refinancing and Efficiency of Microfinance Institutions in Niger
(African Economic Research consortium, 2017-05-30) Hadizatou, Ali
The aim of this study was to establish the effect of refinancing resources (deposits, loans, grants) on the efficiency of 24 microfinance institutions (MFIs) in Niger over the 2005-2008 period. The study’s hypothesis was tested using a Translog function that was estimated in the form of a system with equations of cost-sharing of inputs. The outreach of the activities of the MFIs studied was established by using a descriptive analysis. A Principal Components Analysis revealed that the independent MFIs had recourse to deposits, loans, and grants more often than those affiliated to unions. Econometric results showed that the MFIs in Niger were not efficient. But they also showed that the use of deposits, physical capital and human capital led to a drop in the charges incurred by those MFIs. They further showed while deposits could replace loans and grants, the latter two could not be substituted for each other. The study also found that the social performance of the MFIs in Niger was low, due to the fact that their service outlets were still being set up and were located mostly in large towns. Men formed the majority of customers targeted by the MFIs, and these granted loans mainly to customers living in urban areas. A slowdown in the MFIs’ loan granting was observed in all the country’s regions, which had the effect of lowering the MFIs’ costs related to economies of scale. Finally, the study found that there was a link between MFI efficiency and social performance.
The Effect of Social Capital on Households’ Access to Microcredit in Cameroon in 2001 and 2007
(African Economic Research consortium, 2020-11-07) Metseyem, Clarisse
The aim of this study is to identify the determinants of households’ access to microcredit in Cameroon; in particular the effect of social capital on their access to microcredit in 2001 and 2007. The study is based on data collected during the Cameroon household surveys (ECAM II and III) conducted by the National Institute of Statistics (Institut National de la Statistique, INS) in 2001 and 2007. The Multiple Component Analysis (MCA) was used to construct the social capital index while the probit model was used for modelling. The Heckman two-step procedure was used to deal with the selection bias. The study found that social capital increased the probability of households having access to microcredit. An increase in this probability was observed for the years under study (4.2% for 2001 and 9.52% for 2007). It rose as a function of the level of household income (from the first to the fifth expenditure quintile). These findings suggest that there is a need for encouraging stakeholders (both private individuals and enterprises) to group together into networks.
Impact of Access to Microcredit on the Well-being of Households and Poverty Change in Cameroon: 2001-200
(AERC, 2021-04-19) Ngah, Otabela Nadège
Using data from the second and third Cameroonian household surveys, this study analyzes the relationship between access to microcredit, household well-being, and poverty change in Cameroon. It uses a combination of two methods of analysis: the instrumental variable method for controlling the potential endogeneity of access to increased microcredit by correcting for selection bias; and a method for breaking down poverty change into intra-growth, intra-redistribution, and inter-sector mobility components based on Shapley's value. The latter is based on comparison of evidencebased and hypothetical/non-factual distributions. The key findings reveal that access to microcredit: (i) significantly and positively affects the level of well-being of households and financial inclusion, particularly through education; (ii) has an impact on poverty change and that this effect is brought about by the redistribution component and primary sector; (iii) positively and significantly influences the intra-sector redistribution component of poverty change through the intra-sector growth and mobility components.
The Impact of Conflict on Child Health Outcomes: Micro-Level Evidence from Nigeria
(African Economic Research Consortium, 2023-08-08) Oyinlola, Mutiu A.; Adeniyi, Oluwatosin; Adedeji, Abdulfatai A. Adedeji; Lipede, Omolola M.
Globally, the prevalence of conflicts has taken different dimensions due to exposure to different forms of conflict. Also, extant studies have linked conflict with health outcomes. However, existing studies face the challenge of comprehensive information on different conflict types. Thus, this study provides a comprehensive analysis of the impact of conflicts on child well-being in Nigeria. To achieve the goal, it classified the conflicts into three categories: aggregate, insurgency/terrorism, and herdsmen/farmers’ conflict. Furthermore, robust data are used by exploring four DHS waves (2003, 2008, 2013, and 2018) and integrating three conflict datasets using the MELTT technique. We present three steps of analysis for conflicts and child well-being based on this robust information. The impact of aggregate conflicts on child health outcomes, mechanisms, and across different groups was first investigated. Second, the impact of insurgency/terrorism on child health outcomes, mechanisms, and across different groups was examined. Third, the impact of herdsmen/farmers' conflict on child health outcomes, mechanisms, and across various groups was investigated. The results of a difference-in-difference approach suggest that proximity and exposure to different types of conflict worsened child health outcomes (infant mortality, height-for-age z-score, weight-for-age z-score and weight-for-height z-score). Also, vaccination,hospital visitation, and mother’s education are significantly affected by conflict types. Proximity and exposure to different conflict types forced people to migrate to less conflict-affected areas.
Crop Diversification, Household Nutrition and Child Growth: Empirical Evidence from Ethiopia
(African Economic Research Consortium, 2023-08-08) Tesfaye, Wondimagegn Mesfin
Recently, there has been a resurgence of interest in crop diversification as a strategy to deal with a variety of issues, including malnutrition in the context of a changing climate and poorly developed markets. However, the empirical evidence base to justify this policy position is thin. This research seeks to contribute to the growing literature and the policy discourse by providing empirical evidence on the impact of crop diversification on child growth using panel survey data, combined with historical weather data. The study finds that crop diversification has a positive but small impact on child growth. Results from analysis of heterogeneous effects show that the positive effects are more pronounced in areas with limited access to markets. The study demonstrates that the positive effects of crop diversification on child growth could be mediated through its positive impacts on household diet diversity, diet quality and income.

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