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Informal Institutions and Intergenerational Contracts: Evidence from Schooling and Remittances in Rural Tanzania

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Author Info

  • David Dreyer Lassen

    (Department of Economics, University of Copenhagen)

  • Helene Bie Lilleør

    (Department of Economics, University of Copenhagen)

Abstract

This paper carries out a theoretical and empirical investigation of the role of informal institutions in facilitating intergenerational contracts governing investments in schooling and payments of pensions in the form of remittances. We show, using detailed household level data from rural Tanzania, that informal institutions of social control, rooted in tribal affiliations, determine both the household's investment in schooling and the probability that it receives remittances from migrants. This is consistent with a framework in which households' expected returns in the form of remittances, which is determined partly by the prospects of social control over migrants, influence current investments in schooling.

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Bibliographic Info

Paper provided by University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics in its series CAM Working Papers with number 2008-03.

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Length: 28 pages
Date of creation: Aug 2008
Date of revision:
Handle: RePEc:kud:kuieca:2008_03

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Related research

Keywords: intergenerational contract; social compact; schooling; human capital; traditions; ethnicity; ethnic diversity; social capital; Tanzania; Africa;

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References

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  1. Robert H. Bates, 2000. "Ethnicity and Development in Africa: A Reappraisal," American Economic Review, American Economic Association, vol. 90(2), pages 131-134, May.
  2. Carol Ann Rogers & Kenneth A. Swinnerton, 2004. "Does Child Labor Decrease When Parental Incomes Rise?," Journal of Political Economy, University of Chicago Press, vol. 112(4), pages 939-968, August.
  3. Hoddinott, John, 1994. "A Model of Migration and Remittances Applied to Western Kenya," Oxford Economic Papers, Oxford University Press, vol. 46(3), pages 459-76, July.
  4. Ehrlich, Isaac & Lui, Francis T, 1991. "Intergenerational Trade, Longevity, and Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 1029-59, October.
  5. Bates, R.H., 2000. "Ethicity, Capital Formation, and Conflict," Papers 27, Chicago - Graduate School of Business.
  6. Habyarimana, James P. & Humphreys, Macartan & Posner, Daniel N. & Weinstein, Jeremy, 2006. "Why Does Ethnic Diversity Undermine Public Goods Provision? An Experimental Approach," IZA Discussion Papers 2272, Institute for the Study of Labor (IZA).
  7. Michele Boldrin & Ana Montes, 2005. "The Intergenerational State Education and Pensions," Review of Economic Studies, Oxford University Press, vol. 72(3), pages 651-664.
  8. Kathleen Burke & Kathleen Beegle, 2004. "Why Children Aren't Attending School: The Case of Northwestern Tanzania," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 13(2), pages 333-355, June.
  9. Paul Collier & Jan Willem Gunning, 1998. "Explaining African economic performance," Economics Series Working Papers WPS/1997-02.2, University of Oxford, Department of Economics.
  10. Cox, Donald & Fafchamps, Marcel, 2008. "Extended Family and Kinship Networks: Economic Insights and Evolutionary Directions," Handbook of Development Economics, Elsevier.
  11. Cigno, Alessandro, 1993. "Intergenerational transfers without altruism : Family, market and state," European Journal of Political Economy, Elsevier, vol. 9(4), pages 505-518, November.
  12. Cox, Donald & Rank, Mark R, 1992. "Inter-vivos Transfers and Intergenerational Exchange," The Review of Economics and Statistics, MIT Press, vol. 74(2), pages 305-14, May.
  13. Winters, Paul C. & de Janvry, Alain & Sadoulet, Elisabeth, 1999. "Family And Community Networks In Mexico-U.S. Migration," Working Papers 12907, University of New England, School of Economics.
  14. La Ferrara, Eliana, 2007. "Descent rules and strategic transfers. Evidence from matrilineal groups in Ghana," Journal of Development Economics, Elsevier, vol. 83(2), pages 280-301, July.
  15. Parsons, Donald O & Goldin, Claudia, 1989. "Parental Altruism and Self-Interest: Child Labor among Late Nineteenth-Century American Families," Economic Inquiry, Western Economic Association International, vol. 27(4), pages 637-59, October.
  16. Greif, Avner, 1993. "Contract Enforceability and Economic Institutions in Early Trade: the Maghribi Traders' Coalition," American Economic Review, American Economic Association, vol. 83(3), pages 525-48, June.
  17. Raut, Lakshmi K. & Tran, Lien H., 2005. "Parental human capital investment and old-age transfers from children: Is it a loan contract or reciprocity for Indonesian families?," Journal of Development Economics, Elsevier, vol. 77(2), pages 389-414, August.
  18. Vigdor, Jacob L., 2002. "Interpreting ethnic fragmentation effects," Economics Letters, Elsevier, vol. 75(2), pages 271-276, April.
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Cited by:
  1. Matthew Collin, 2013. "Tribe or title? Ethnic enclaves and the demand for formal land tenure in a Tanzanian slum," CSAE Working Paper Series 2013-12, Centre for the Study of African Economies, University of Oxford.

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