Sibling Dependence, Uncertainty and Education: Findings from Tanzania
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Sibling Dependence, Uncertainty and Education : Findings from Tanzania. / Lilleør, Helene Bie.
Centre for Advanced Econometrics, Department of Economics, University of Copenhagen, 2008.Publikation: Working paper › Forskning
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TY - UNPB
T1 - Sibling Dependence, Uncertainty and Education
T2 - Findings from Tanzania
AU - Lilleør, Helene Bie
N1 - JEL classification: J13, J24, O15
PY - 2008
Y1 - 2008
N2 - Primary school enrolment rates are continuously low in many developing countries. The main explanation in the economic literature on schooling is focused on credit constraints and child labour, implying that the indirect cost of schooling in terms of foregone earnings is too high. This paper investigates the effects of future income uncertainty on sibling dependence in the schooling decisions of rural households in developing countries. Schooling tends to direct skills towards future urban employment, whereas traditional rural education or on-farm learning-by-doing tends to direct skills towards future agricultural employment. Given this dichtomy, the question is then: Does future income uncertainty influence the joint educational choice made by parents on behalf of their children and is it possible to test this on simple cross-sectional data? I extend a simple human capital portfolio model to a three period setting. This allows me to explore the natural sequentiality in the schooling decision of older and younger siblings. The model can generate testable empirical implications, which can be taken to any standard cross-sectional data set. I find empirical evidence of negative sibling dependence in the educational decision, which is consistent with a human capital portfolio theory of risk diversification and which cannot be explained by sibling rivalry over scarce resources for credit constrained households. The paper thus provides a complementary explanation to why enrolment rates in developing countries are often continuously low.
AB - Primary school enrolment rates are continuously low in many developing countries. The main explanation in the economic literature on schooling is focused on credit constraints and child labour, implying that the indirect cost of schooling in terms of foregone earnings is too high. This paper investigates the effects of future income uncertainty on sibling dependence in the schooling decisions of rural households in developing countries. Schooling tends to direct skills towards future urban employment, whereas traditional rural education or on-farm learning-by-doing tends to direct skills towards future agricultural employment. Given this dichtomy, the question is then: Does future income uncertainty influence the joint educational choice made by parents on behalf of their children and is it possible to test this on simple cross-sectional data? I extend a simple human capital portfolio model to a three period setting. This allows me to explore the natural sequentiality in the schooling decision of older and younger siblings. The model can generate testable empirical implications, which can be taken to any standard cross-sectional data set. I find empirical evidence of negative sibling dependence in the educational decision, which is consistent with a human capital portfolio theory of risk diversification and which cannot be explained by sibling rivalry over scarce resources for credit constrained households. The paper thus provides a complementary explanation to why enrolment rates in developing countries are often continuously low.
KW - Faculty of Social Sciences
KW - Afrika
KW - schooling
KW - human capital investment
KW - specific human capital
KW - old-age security
KW - risk and income source diversification
KW - liquidity constraints
KW - Africa
M3 - Working paper
BT - Sibling Dependence, Uncertainty and Education
PB - Centre for Advanced Econometrics, Department of Economics, University of Copenhagen
ER -
ID: 5362468