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Higher Education Decisions in Peru: On the Role of Financial Constraints, Skills, and Family Background

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Author Info

  • Juan Castro

    ()
    (Departamento de Economía, Universidad del Pacífico)

  • Gustavo Yamada

    ()
    (Departamento de Economía, Universidad del Pacífico)

  • Omar Arias

    ()
    (Departamento de Economía, Universidad del Pacífico)

Abstract

"This paper analyzes the relative importance of short term financial constraints vis a vis skills and other background factors affecting schooling decisions when explaining access to higher education in Peru. We focus on college access disparities between rich and poor households. We use a novel household survey that includes special tests to measure cognitive and non-cognitive skills of the urban population age 14-50. These are complemented with retrospective data on basic education and family socioeconomic conditions in a multinomial model. We find that strong correlation between college enrollment and family income in urban Peru is not only driven by credit constraints, but also by poor college readiness in terms of cognitive skills and by poor family and educational backgrounds affecting preferences for schooling. Family income explains, at most, half of the college access gap between poor and non-poor households. The other half is related to differences in parental education, educational background and cognitive skills. Our results indicate that credit and/or scholarship schemes alone will not suffice to change the regressive nature of higher education enrollment in Peru, and that such programs will face strong equity-efficiency trade-offs."

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File URL: http://www.up.edu.pe/ciup/SiteAssets/Lists/JER_Jerarquia/EditForm/11-14.pdf
File Function: First Version, 2011
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Bibliographic Info

Paper provided by Departamento de Economía, Universidad del Pacífico in its series Working Papers with number 11-14.

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Length: 35 pages
Date of creation: Dec 2011
Date of revision: Dec 2011
Handle: RePEc:pai:wpaper:11-14

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Web page: http://www.up.edu.pe/
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Related research

Keywords: Higher education; Cognitive skills; Non-cognitive skills; Credit constraints; Peru;

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References

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  1. Karsten Hansen & James J. Heckman & Kathleen J. Mullen, 2003. "The Effect of Schooling and Ability on Achievement Test Scores," NBER Working Papers 9881, National Bureau of Economic Research, Inc.
  2. Maria K. Humlum & Kristin J. Kleinjans & Helena S. Nielsen, 2012. "An Economic Analysis Of Identity And Career Choice," Economic Inquiry, Western Economic Association International, vol. 50(1), pages 39-61, 01.
  3. Lex Borghans & Angela Lee Duckworth & James J. Heckman & Bas ter Weel, 2008. "The Economics and Psychology of Personality Traits," Working Papers 200827, Geary Institute, University College Dublin.
  4. Flavio Cunha & James J. HECKMAN, 2009. "Investing in our Young People," Rivista Internazionale di Scienze Sociali, Vita e Pensiero, Pubblicazioni dell'Universita' Cattolica del Sacro Cuore, vol. 117(3), pages 387-418.
  5. Eric A. Hanushek & Ludger Woessmann, 2009. "Schooling, Cognitive Skills, and the Latin American Growth Puzzle," NBER Working Papers 15066, National Bureau of Economic Research, Inc.
  6. Gustavo Yamada & Juan Castro, 2010. "Educación superior e ingresos laborales: Estimaciones paramétricas y no paramétricas de la rentabilidad por niveles y carreras en el Perú," Working Papers 10-06, Departamento de Economía, Universidad del Pacífico, revised Dec 2010.
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Cited by:
  1. Juan Castro & Gustavo Yamada, 2012. "“Convexification” and “Deconvexification” of the Peruavian Wage Profile: A Tale of Declining Education Quality," Working Papers 12-02, Departamento de Economía, Universidad del Pacífico, revised Apr 2012.

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