Abstract
This thesis investigated the multidimensional returns to education in Zambia by analysing both economic and non-economic outcomes. It explored how education influences individual earnings, entrepreneurship participation and income, political participation, and environmental awareness, key dimensions of human and social development that extend beyond the traditional wage framework. The thesis comprises six chapters: Chapter 1 presents the background, research problem, objectives, and significance of the study. It also defines the scope of the study and outlines the overall structure of the thesis. Chapters 2 to 5 present the four empirical analyses, and Chapter 6 provides the conclusions and policy implications.
The first empirical chapter investigated regional heterogeneities in returns to education in Zambia. Given the country’s regional and socio-economic disparities, the chapter highlighted the importance of a regional approach to understanding how education translates into income in the four main regions of Zambia. This chapter applied quantile regression and quantile instrumental variable methods to estimate heterogeneous effects of education across the wage distribution, while addressing endogeneity. The findings showed within-country variations in returns to education in Zambia, with urban areas exhibiting the highest returns, followed by peri-urban areas, and the lowest in rural regions. The findings emphasised the importance of regionally targeted education and labour market policies to promote equitable and inclusive development.
The second empirical chapter analysed the entrepreneurial returns to education by comparing the effects of formal education, vocational training, and prior entrepreneurial knowledge on entrepreneurship participation and income in Zambia’s informal sector. The chapter applied the quantile regression sample selection model developed by Arellano and Bonhomme (2017) to correct for selection bias and capture heterogeneity in entrepreneurial income. Findings showed that all three forms of education significantly enhance entrepreneurship entry and income, with formal education yielding the strongest effects. By focusing on the informal sector and incorporating health factors, the chapter filled an important empirical gap, revealing how education benefits the informal sector, particularly in developing economies like Zambia, where the majority of citizens are self-employed...