This paper explores social benefits, or externalities, of education in Ethiopia. Enrolment has expanded rapidly across all phases of formal education, yet there is limited evidence of its potential externalities in this context. This paper draws on the Young Lives study which provides longitudinal data on the lives of children over the past two decades. Using data from Young Lives’ older cohort of survey respondents, our results show that young people who participated in education beyond secondary level were more likely to engage in community action and to voluntarily give to community organizations or political groups than young people with lower levels of education. These results show the potential externalities of education. Importantly, the paper situates empirical analyses and results in the socio-cultural realities within and beyond the education sector in Ethiopia. The paper thus provides a deeper and contextually relevant understanding for the existence of social benefits and the potential enhancement of these through formal education.