Working Paper

Estimating Returns to Education in Zambia

“For a long time, Zambia has had no studies estimating returns to education despite this being a critical factor in knowing what is driving the demand to education, particularly different levels of education. This paper has estimated the returns to education in Zambia using the instrumental variable generalized method of moments approach. The study found that the returns to education in Zambia are 15.1 percent. It is also found that females have a higher return to education than males and that returns to education are higher in urban areas than in rural areas. This clearly entails that urban areas have sufficient incentive to drive the demand for education while rural areas lag behind.”