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


  • David Dreyer Lassen

    (Department of Economics, University of Copenhagen)

  • Helene Bie Lilleør

    (Department of Economics, University of Copenhagen)


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.

Suggested Citation

  • David Dreyer Lassen & Helene Bie Lilleør, 2008. "Informal Institutions and Intergenerational Contracts: Evidence from Schooling and Remittances in Rural Tanzania," CAM Working Papers 2008-03, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics.
  • Handle: RePEc:kud:kuieca:2008_03

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    References listed on IDEAS

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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.

    More about this item


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

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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