Intergenerational effect of education reform program and maternal education on children's educational and labor outcomes: evidence from Nepal

We examine a potential intergenerational determinant of child labor by investigating the effect of maternal education on children0s educational and labor outcomes. To account for endogeneity of mother's education, we use the Nepal Education System Plan (NESP) (1971), one of the first education reforms in the country, as an exogenous source of variation. We find that NESP increased educational outcomes among females that were most likely affected by the reform due to their birth year and district of birth. Furthermore, an increase in mother's highest level of schooling increases a child's probability of finishing 5th grade only among mothers from a higher caste households. We find modest effects of mother's education on child labor outcomes, with the IV estimate indicating that a year increase in mother's education reduces a child's weekly work by approximately an hour. The IV estimates are about two-fold larger than the OLS estimates in most cases. We caution that exclusion based on social hierarchy should be considered when promoting maternal education as a medium to improve children's well-being in developing nations like Nepal.