The Influence Of Microfinance On The Education Decisions Of Rural Households: Evidence From Bolivia
Increased access to education will be key in any efforts to improve the quality of rural life and the welfare of the next generation in developing countries. Microfinance programshave been among components of strategies for poverty alleviation that have attempted to address this challenge. This essay uses data from three different surveys of households of clients of microfinance Organizations (MFOs) in Bolivia to examine several channels through which microfinance may exert an influence on Education outcomes. Five channels are identified, designated as income, risk-management, child-labor demand, gender, and information effects. Based on an econometric specification that explains schooling decisions at the household level, regression models are used to examine determinants of education achievements and to make inferences about the potential influence of microfinance, through these channels, on those achievements. The results challenge usual assumptions in microfinance programs. In particular, for some ranges of household income and some types of borrowers, access to loans has conflicting effects on school enrollment. On the one hand, loans increase the demand for education as a result of income, risk-management, gender, and information effects. On the other hand, credit-constrained households that cultivate land or operate labor-intensive microenterprises discover new demands for child labor, either for farming, working in the microenterprise, or taking care of siblings while the mothers operate the new or expanded business. Significant program and policy consequences are derived from these paradoxical results.
|Date of creation:||10 Aug 2005|
|Date of revision:|
|Contact details of provider:|| |
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hanan G. Jacoby & Emmanuel Skoufias, 1997. "Risk, Financial Markets, and Human Capital in a Developing Country," Review of Economic Studies, Oxford University Press, vol. 64(3), pages 311-335.
- George Psacharopoulos & Harry Anthony Patrinos, 1997. "Family size, schooling and child labor in Peru - An empirical analysis," Journal of Population Economics, Springer;European Society for Population Economics, vol. 10(4), pages 387-405.
- Jonathan Morduch, 1995.
"Income Smoothing and Consumption Smoothing,"
Harvard Institute of Economic Research Working Papers
1727, Harvard - Institute of Economic Research.
- Suzanne Duryea & Carmen Pagés-Serra, 2002.
"Human Capital Policies: What they Can and Cannot Do for Productivity and Poverty Reduction in Latin America,"
Research Department Publications
4297, Inter-American Development Bank, Research Department.
- Suzanne Duryea & Carmen Pagés, 2002. "Human Capital Policies: What they Can and Cannot Do for Productivity and Poverty Reduction in Latin America," IDB Publications (Working Papers) 4125, Inter-American Development Bank.
- Peter J. Klenow & Mark Bils, 2000. "Does Schooling Cause Growth?," American Economic Review, American Economic Association, vol. 90(5), pages 1160-1183, December.
- Shelley Phipps & Peter Burton, 1995. "Social/institutional variables and behavior within households: An empirical test using the Luxembourg income study," Feminist Economics, Taylor & Francis Journals, vol. 1(1), pages 151-174.
- Lee A. Lillard & Robert J. Willis, 1994.
"Intergenerational Educational Mobility: Effects of Family and State in Malaysia,"
Journal of Human Resources,
University of Wisconsin Press, vol. 29(4), pages 1126-1166.
- Lillard, L.A. & Willis, R.J., 1995. "Intergenerational Educational Mobility, Effects of Family and State in Malaysia," Papers 95-02, RAND - Reprint Series.
- Lillard, L.A. & Willis, R.J., 1993. "Intergenerational Educational Mobility: Efects of Family and State in Malaysia," Papers 93-38, RAND - Labor and Population Program.
- Behrman, Jere R & Knowles, James C, 1999. "Household Income and Child Schooling in Vietnam," World Bank Economic Review, World Bank Group, vol. 13(2), pages 211-56, May.
- Robert J. Barro & Jong-Wha Lee, 2000.
"International Data on Educational Attainment: Updates and Implications,"
CID Working Papers
42, Center for International Development at Harvard University.
- Barro, Robert J & Lee, Jong-Wha, 2001. "International Data on Educational Attainment: Updates and Implications," Oxford Economic Papers, Oxford University Press, vol. 53(3), pages 541-63, July.
- Robert J. Barro & Jong-Wha Lee, 2000. "International Data on Educational Attainment Updates and Implications," NBER Working Papers 7911, National Bureau of Economic Research, Inc.
- Mikael Lindahl & Alan B. Krueger, 2001.
"Education for Growth: Why and for Whom?,"
Journal of Economic Literature,
American Economic Association, vol. 39(4), pages 1101-1136, December.
- Mark M. Pitt & Shahidur R. Khandker, 1998. "The Impact of Group-Based Credit Programs on Poor Households in Bangladesh: Does the Gender of Participants Matter?," Journal of Political Economy, University of Chicago Press, vol. 106(5), pages 958-996, October.
- Jere R. Behrman & Mark R. Rosenzweig, 2002. "Does Increasing Women's Schooling Raise the Schooling of the Next Generation?," American Economic Review, American Economic Association, vol. 92(1), pages 323-334, March.
- Peter Jensen & Helena Skyt Nielsen, 1997.
"Child labour or school attendance? Evidence from Zambia,"
Journal of Population Economics,
Springer;European Society for Population Economics, vol. 10(4), pages 407-424.
- Jensen, P. & Nielsen, H.S., 1996. "Child Labour or School Attendance? Evidence from Zambia," Papers 96-14, Centre for Labour Market and Social Research, Danmark-.
- George Psacharopoulos, 1997. "Child labor versus educational attainment Some evidence from Latin America," Journal of Population Economics, Springer;European Society for Population Economics, vol. 10(4), pages 377-386.
When requesting a correction, please mention this item's handle: RePEc:col:000089:003606. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Universidad De Los Andes-Cede)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.