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Higher education decisions in Peru : on the role of financial constraints, skills, and family background

Author

Listed:
  • Juan F. Castro

    (Universidad del Pacífico)

  • Gustavo Yamada

    (Universidad del Pacífico)

  • Omar Arias

    (World Bank)

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.

Suggested Citation

  • Juan F. Castro & Gustavo Yamada & Omar Arias, 2011. "Higher education decisions in Peru : on the role of financial constraints, skills, and family background," Working Papers 11-14, Centro de Investigación, Universidad del Pacífico.
  • Handle: RePEc:pai:wpaper:11-14
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    File URL: http://repositorio.up.edu.pe/bitstream/handle/11354/374/DD1114.pdf?sequence=1&isAllowed=y
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    References listed on IDEAS

    as
    1. Hansen, Karsten T. & Heckman, James J. & Mullen, K.J.Kathleen J., 2004. "The effect of schooling and ability on achievement test scores," Journal of Econometrics, Elsevier, vol. 121(1-2), pages 39-98.
    2. repec:fth:prinin:357 is not listed on IDEAS
    3. 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.
    4. Pedro Carneiro & James J. Heckman, 2002. "The Evidence on Credit Constraints in Post--secondary Schooling," Economic Journal, Royal Economic Society, vol. 112(482), pages 705-734, October.
    5. 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, January.
    6. Lex Borghans & Angela Lee Duckworth & James J. Heckman & Bas ter Weel, 2008. "The Economics and Psychology of Personality Traits," Journal of Human Resources, University of Wisconsin Press, vol. 43(4).
    7. Gustavo Yamada & Juan F. 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, Centro de Investigación, Universidad del Pacífico.
    8. Eric A. Hanushek & Ludger Wößmann, 2009. "Schooling, Cognitive Skills, and the Latin American Growth Puzzle," CESifo Working Paper Series 2667, CESifo Group Munich.
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    Cited by:

    1. Juan F. Castro & Gustavo Yamada, 2012. "“Convexification” and “deconvexification” of the peruvian wage profile: a tale of declining education quality," Working Papers 12-02, Centro de Investigación, Universidad del Pacífico.
    2. Pablo Lavado & Gustavo Yamada & Ana Paula Franco & Emilia Abusada, 2015. "Skills for the First Job," Working Papers 2015-59, Peruvian Economic Association.
    3. World Bank, 2013. "Labor Markets for Inclusive Growth," World Bank Other Operational Studies 16579, The World Bank.
    4. Gustavo Yamada & Pablo Lavado & Ana Paula Franco & Emilia Abusada, 2016. "First impressions matter for life: the contribution of skills for the firt job," Working Papers 16-13, Centro de Investigación, Universidad del Pacífico.

    More about this item

    Keywords

    Higher education; cognitive skills; non-cognitive skills; credit constraints; Peru;

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