Regional heterogeneities in returns to education in Zambia: a quantile regression analysis

Purpose: This study determines the existence of regional heterogeneities in returns to education in Zambia. It seeks to analyse the differential impact of education on wages across different geographical regions of Zambia. Adopting a regional approach, the study employs novel empirical methods to understand the pecuniary benefits of education at the sub-national level. Design/methodology/approach: The study analyses data from Zambia’s 2021 Labour Force Survey. It employs modified human capital models and quantile regression techniques to examine how returns to education differ across regions and the wage distribution. Findings: Results show a distinctive heterogeneous pattern in which returns to education are higher in urban regions, followed by peri-urban, and lowest in the rural region. Results further show that returns to education increase with the level of education and are highest at the tertiary level. Quantile regression estimates reveal that returns to education vary across income levels within regions, suggesting a necessity for tailored policy interventions. Additionally, individuals’ health conditions display direct effects on their earnings potential. Originality/value: This study adopts a modified human capital model to account for the health dimension, which has received less attention in past returns to education research. Furthermore, a regional approach is employed to capture within-country variations necessary for designing policy interventions aimed at addressing region-specific challenges. Peer review: The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-03-2024-0262