When better education doesn't lead to a better job

Many visitors in poor, sub-Saharan African countries are struck by how schools outnumber factories. The large number of schools is due partly to the success of one of the Millennium Development Goals – that primary education should be available to all children.

According to the World Bank, the proportion of boys finishing primary school in sub-Saharan Africa increased from 58% to 73% between 1999 and 2012. In the same period, the proportion of girls finishing primary school climbed from 48% to 66%.

But what are these newly educated young people doing? In urban areas, many are hawking goods in the street, sitting around in small stalls and finding somewhere as comfortable as possible to sleep.

Jobs haven’t materialised

The idea is that education should enable youth to have better jobs of the sort you might find in factories and new businesses. Despite the number of schools and higher education levels, the jobs for these young people haven’t materialised.

Yet as so many young people seem to have so little to do, could they be working out of sight? The data suggests the answer to that question is no. Factories employ only tiny numbers of these young people.

The figure below shows why we care a lot about the earnings opportunities which arise at different levels of education in sub-Saharan Africa. The extent of the investment in education has dramatically changed the skill composition of Africa’s population.

The figure also shows that, in 1960, some 90% of Africa’s adult population had no education, meaning that they had failed to complete primary level. By 2010, the proportion with no education had roughly halved: nearly 40% of the population aged 15 and above had now completed primary education.

Barro and Lee (2010)

Private sector job creation fails Nigerians

The rapid rises in school enrolment rates will mean that the levels of education (a proxy for skills) among the young today will be much higher than the averages shown in the graph. The task of policy is to ensure jobs for these newly educated young adults now entering the labour market. While success in creating the newly educated is clear, so is the failure of job creation.

The table below gives a breakdown of the employment outcomes for young Nigerians over the period 1999 to 2010. As with most African data there are problems, but the broad message is unmistakable: private sector wage job creation has failed Nigerians. This failure has been most pronounced for young adults – those aged between 15 and 25 and not in full-time education.

See note at the bottom of the article.

The number of private sector wage jobs in Nigeria has scarcely changed over the period covered in the table, while the labour force has increased by more than 40%. For young adults, the situation is dire.

For the young, the number in private sector wage jobs has nearly halved. In 2010, less than 4% of that age group had a private sector wage job. Many Africans seek public rather than private sector jobs – so has job creation in this sector increased?

The answer for the young is that while the number of these jobs has remained roughly constant as a proportion of the young population, the overall number of jobs has nearly halved.

Educated find work in agriculture and urban self-employment

So, what are the newly educated young doing in Nigeria? They are not appearing in unemployment data as that has scarcely changed. Instead, there has been a massive increase in those working on family farms and in urban self-employment.

These are exactly the sectors where the skills of the newly educated are least useful and, particularly in the rural sector, where they least wish to work.

Deprived of the kind of earnings opportunities they seek, the youth will feel both short-changed and angry. Their anger is wholly justified by the scale of policy failure in this area.

Note: The figures shown for 1991 to 2006 are estimates of the numbers in each category derived from the General Household Survey (GHS) survey using household weights as reported in Teal (2014) Employment Creation, Poverty and the Structure of the Job Market in Nigeria, CSAE Working Paper WPS/2014-18. The data for 2010-11 is from the Nigeria General Household Panel for 2010-2011, where the post planting version of the survey has been used.

The numbers in the table are absolute levels of employment in the various sectors. The figures in brackets are column percentages. The figures for unpaid non-agricultural workers are based on a very small sample. It is likely the numbers for apprentices in the 2010-2011 survey are greatly understated and those in self-employed non-agriculture overstated. For all years survey weights are used.

Francis Teal has received funding from DfID, the ESRC and the World Bank.