Oil and ethnic inequality in Nigeria

Abstract

Although it is known that ethnic biases exist in Africa, less is known about how these respond to natural resource prices. Many ethnically fragmented African countries depend on a small number commodities for their export base. Oil prices experienced in early life predict differential adult outcomes across Nigerian ethnic groups. Our difference-in-difference approach compares members of southern ethnicities to other Nigerians from the same birth cohort. This North-South distinction mirrors several economic, political, and religious cleavages in the country. Greater prices in a southern individual’s birth year predict several relative outcomes, including reduced fertility, delayed marriage, higher probabilities of working and having a skilled occupation, greater schooling, lower height, and greater BMI. These microeconomic impacts are explained by macroeconomic responses to oil prices; relatively, urban incomes increase, food production declines, and maternal labor intensifies in the South.