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Risk and Time Preference on Schooling:Experimental Evidence from a Low-Income Country

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  • Yuki Tanaka

    (National Graduate Institute for Policy Studies)

  • Takashi Yamano

    (International Rice Research Institute)

Abstract

Educational investment involves risks and long-term commitment, and the degree of risk aversion or patience of parents could play a vital role in the schooling decision. Yet, there are few studies analyzing the impact of such preferences on educational investment. This paper utilizes a unique dataset with a large-scale field experiment of preferences and estimates the impacts of the patience and risk aversion of the parents on school attendance, delayed enrollment, and the education expenditure of their children in Uganda. Our results show that the risk aversion of the parent delays enrollment of young children, especially boys. This could be explained by parents’ security concerns for their young children. Girls of impatient parents have high attendance rates when they are young (6 – 9 years old) but have low attendance rates when they are older (10 – 13 years old). Boys aged 10 to 13 have low attendance rates if their parents have a high present bias. Finally, the patience of the parents increases the education expenditure.

Suggested Citation

  • Yuki Tanaka & Takashi Yamano, 2015. "Risk and Time Preference on Schooling:Experimental Evidence from a Low-Income Country," GRIPS Discussion Papers 14-24, National Graduate Institute for Policy Studies.
    • Handle: RePEc:ngi:dpaper:14-24
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    References listed on IDEAS

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    1. Basu, Arnab & Dimova, Ralitza & Gbakou, Monnet & Viennet, Romane, 2023. "Parental risk preferences, maternal bargaining power, and the educational progressions of children: Lab-in-the-field evidence from rural Côte d'Ivoire," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 102(C).
    2. Basu, Arnab K. & Dimova, Ralitza, 2020. "Household Behavioral Preferences and the Child Labor-Education Trade-off: Framed Field Experimental Evidence from Ethiopia," IZA Discussion Papers 13011, Institute of Labor Economics (IZA).
    3. Charlotte Ringdal & Ingrid Hoem Sjursen, 2021. "Household Bargaining and Spending on Children: Experimental Evidence from Tanzania," Economica, London School of Economics and Political Science, vol. 88(350), pages 430-455, April.
    4. Ringdal, Charlotte & Sjursen, Ingrid Hoem, 2017. "Household bargaining and spending on children: Experimental evidence from Tanzania," Discussion Paper Series in Economics 19/2017, Norwegian School of Economics, Department of Economics.

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