Sibling Dependence, Uncertainty and Education: Findings from Tanzania
AbstractPrimary 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.
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Bibliographic InfoPaper provided by University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics in its series CAM Working Papers with number 2008-05.
Length: 24 pages
Date of creation: Aug 2008
Date of revision:
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More information through EDIRC
schooling; human capital investment; specific human capital; sibling dependency; old-age security; uncertainty; risk and income source diversification; liquidity constraints; Tanzania; Africa;
Find related papers by JEL classification:
- J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
This paper has been announced in the following NEP Reports:
- NEP-AFR-2008-08-14 (Africa)
- NEP-ALL-2008-08-14 (All new papers)
- NEP-DEV-2008-08-14 (Development)
- NEP-EDU-2008-08-14 (Education)
- NEP-HRM-2008-08-14 (Human Capital & Human Resource Management)
- NEP-LAB-2008-08-14 (Labour Economics)
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- Thomas, Duncan & Strauss, John & Henriques, Maria-Helena, 1990. "Child survival, height for age and household characteristics in Brazil," Journal of Development Economics, Elsevier, vol. 33(2), pages 197-234, October.
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