The effect of education on household poverty in Oyo state, Nigeria

Poverty is a multidimensional phenomenon that affects many people’s progress and development in this present age, especially in the developing country like Nigeria. The existing literature reviewed in this study established that education and poverty are negatively associated. Even the Sustainable Development Goals (SDGs) of the United Nations recommends education has one of the most important grand designs required to eradicate poverty and other deprivations (United Nations, 2019). Education raises people’s productive capacity and thus increases their earnings in the workplace (Schultlz, 1961). In household production, consumers use inputs and times to produce goods, and education reduces the absolute and relative marginal costs of producing these goods. In addition, education affects some individuals’ decisions such as quantity and quality of children, addiction to drugs, growth in consumption (savings) during the life cycle etc. (Grossman, 2005, Cutler and Lleras, 2006, Haveman and Wolfe, 1984, Micheal, 1972 and Becker, 1965), and consequently may allow them to avoid or get out of poverty. This study aims to examine the effect of education on household poverty in Oyo state, Nigeria using data collected from the Nigeria General Household Survey (GHS), Panel 2015-2016, Wave 3 conducted by the National Bureau of Statistics (NBS). The total sample size for this study is 186 respondents, and the probit regression model is used to estimate model. Results show that education has a negative impact on the probability of being income poor, probability of having poor health conditions, likelihood of living under poor housing conditions, probability of having poor children educational attainment and likelihood of experiencing child mortality, irrespective of the educational indicator employed. Another notable finding is that, the higher the level of education, the lower the probability of being poor. A key contribution of this study is that it estimated the effect of education on various dimensions of poverty which will give a better understanding to why education should be considered an essential tool in targeting poverty. The study recommends investment in education as strictly necessary for the poverty reduction reforms, particularly in tertiary education.