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CSAE WPS/2010-25
Higher Education and Economic Development in Africa:
a Review of Channels and Interactions (a)
Francis Teal
Centre for the Study of African Economies
University of Oxford
August 2010
Abstract
While the numbers with completed tertiary level education are low in Africa, both relative to other
countries and in absolute terms, they have been growing very rapidly. Three questions are addressed
in this paper. The first is how higher education links to other forms of capital accumulation in a
process that leads to economic growth. The second is how higher education links to job outcomes in
particular the role of the public sector and self-employment as outcomes for graduates. The third is
whether and how an expansion of skilled jobs can create its own demand. The paper draws on both
macro and micro evidence to answer those questions which are placed in a long run historical context.
It is argued that growth has been more closely linked to investment in physical capital than in
education and this may well reflect the fact that education is most valuable when it is linked to
technology which requires higher skills. Data from thirty two African countries are used to show that
the returns to education, measured both by macro production functions and by micro earning
functions, are highest for those with higher levels of education. A contrast is drawn between the role
of higher education in providing access to public sector employment and the increasing importance of
self-employment in Africa. The paper
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