Abstract:
Purpose: Returns on education was found to be worker, scale and allocative effects with positive
higher payoff to agricultural productivity but its effects on non-farm employment among agricultural
households who obtain income through non-farm activities to complement proceeds of agricultural
activities are not yet known. Therefore, this study critically investigates the real cost effect of education
on involvement in non-farm employment among rural households in South-western Nigeria.
Research Method: The study drew a sample of 411 rural farm households through a multi-stage
sampling technique from three states in southwest Nigeria and the data obtained were analyzed using
the Mincerian equation, logistic model, inverse of Herfindahl index, calculation of expected annual
rural income earning and rates of return to schooling.
Findings: Results indicate that mean age and education of the rural household heads were 49.9 years
and 8.8 years respectively while the household incomes were diversified up to 2.82 level and the nonfarm sources contributed an average of 67% of the total income. Education is found to have considerable
returns of N4706.30 (US$31.95) to gross household income and an additional year of schooling from
other members of the households returns of N12519.90 (US$85) to the households’ income. Education
of the household heads increases the probability of farm households participating in rural non-farm
employment but the probability of participation reduces with increased level of education of the
household heads. Tertiary education has the highest opportunity costs of schooling (N352200.04) per
annum and the lowest rate of return to schooling (0.57%) from rural non-farm employment.
Research Limitations: The study revealed the real cost of rural farm households’ educational level on
the type of non-farm employment and income generated through it. The study presents information on
south-western zone of Nigeria.
Originality/Value: The practical value of this research is that decline rates of return to higher education
reveal the rural non-farm employment being not the prime incentive for rural farm households’
members in obtaining higher education in rural southwest Nigeria. Therefore, implications are drawn
for an integrated approach to higher education which may yield agricultural and non-agricultural
transformation in rural Nigeria.
