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Income Risks, Gender, and Human Capital Investment in a Developing Country

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Listed author(s):
  • Yasuyuki Sawada

    (Faculty of Economics, University of Tokyo)

Abstract

This paper investigates the role of permanent and transitory incomes in educational investments using household panel data from Pakistan. The empirical results indicate that transient poverty is a serious obstacle to human capital investment. Our analysis also points out that schooling response to an income shock is consistently larger for daughters than sons and that there may exist resource competition among siblings. Human capital investment and intrahousehold schooling allocation decisions seem to be affected by a need for self-insurance devices under binding credit constraints. As a by-product, our empirical results are in favor of the investment model of education against the consumption model.

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File URL: http://www.cirje.e.u-tokyo.ac.jp/research/dp/2003/2003cf198.pdf
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Paper provided by CIRJE, Faculty of Economics, University of Tokyo in its series CIRJE F-Series with number CIRJE-F-198.

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Length: 40 pages
Date of creation: Feb 2003
Handle: RePEc:tky:fseres:2003cf198
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  1. 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.
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  3. Townsend, Robert M, 1994. "Risk and Insurance in Village India," Econometrica, Econometric Society, vol. 62(3), pages 539-591, May.
  4. Ogaki, Masao & Zhang, Qiang, 2001. "Decreasing Relative Risk Aversion and Tests of Risk Sharing," Econometrica, Econometric Society, vol. 69(2), pages 515-526, March.
  5. Christopher Udry, 1994. "Risk and Insurance in a Rural Credit Market: An Empirical Investigation in Northern Nigeria," Review of Economic Studies, Oxford University Press, vol. 61(3), pages 495-526.
  6. Marcel Fafchamps & Agnes R. Quisumbing, 1999. "Human Capital, Productivity, and Labor Allocation in Rural Pakistan," Journal of Human Resources, University of Wisconsin Press, vol. 34(2), pages 369-406.
  7. William L. Parish & Robert J. Willis, 1993. "Daughters, Education, and Family Budgets Taiwan Experiences," Journal of Human Resources, University of Wisconsin Press, vol. 28(4), pages 863-898.
  8. Amemiya, Takeshi, 1981. "Qualitative Response Models: A Survey," Journal of Economic Literature, American Economic Association, vol. 19(4), pages 1483-1536, December.
  9. Carter, Michael R., 1988. "Equilibrium credit rationing of small farm agriculture," Journal of Development Economics, Elsevier, vol. 28(1), pages 83-103, February.
  10. Alderman, Harold, 1996. "Saving and economic shocks in rural Pakistan," Journal of Development Economics, Elsevier, vol. 51(2), pages 343-365, December.
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  13. Pender, John L., 1996. "Discount rates and credit markets: Theory and evidence from rural india," Journal of Development Economics, Elsevier, vol. 50(2), pages 257-296, August.
  14. Fafchamps, Marcel, 1992. "Solidarity Networks in Preindustrial Societies: Rational Peasants with a Moral Economy," Economic Development and Cultural Change, University of Chicago Press, vol. 41(1), pages 147-174, October.
  15. Rosenzweig, Mark R & Stark, Oded, 1989. "Consumption Smoothing, Migration, and Marriage: Evidence from Rural India," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 905-926, August.
  16. Fafchamps, Marcel & Pender, John, 1997. "Precautionary Saving, Credit Constraints, and Irreversible Investment: Theory and Evidence from Semiarid India," Journal of Business & Economic Statistics, American Statistical Association, vol. 15(2), pages 180-194, April.
  17. Anjini Kochar, 2000. "Parental Benefits from Intergenerational Coresidence: Empirical Evidence from Rural Pakistan," Journal of Political Economy, University of Chicago Press, vol. 108(6), pages 1184-1209, December.
  18. Yasuyuki Sawada, 1997. "Human Capital Investments in Pakistan: Implications of Micro Evidence from Rural Households," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 36(4), pages 695-712.
  19. Sawada, Yasayuki & Lokshin, Michael, 2001. "Household schooling decisions in rural Pakistan," Policy Research Working Paper Series 2541, The World Bank.
  20. Jonathan Morduch, 1995. "Income Smoothing and Consumption Smoothing," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 103-114, Summer.
  21. Nancy Birdsall & David Ross & Richard Sabot, 1993. "Underinvestment in Education: How Much Growth has Pakistan Foregone?," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 32(4), pages 453-499.
  22. Timothy Besley, 1995. "Nonmarket Institutions for Credit and Risk Sharing in Low-Income Countries," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 115-127, Summer.
  23. Harold Alderman & Jere R. Behrman & David R. Ross & Richard Sabot, 1996. "Decomposing the Gender Gap in Cognitive Skills in a Poor Rural Economy," Journal of Human Resources, University of Wisconsin Press, vol. 31(1), pages 229-254.
  24. Gary Chamberlain, 1980. "Analysis of Covariance with Qualitative Data," Review of Economic Studies, Oxford University Press, vol. 47(1), pages 225-238.
  25. Alderman, Harold & Garcia, Marito, 1993. "Poverty, household food security, and nutrition in rural Pakistan:," Research reports 96, International Food Policy Research Institute (IFPRI).
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Cited by:

  1. David SAHN & Peter GLICK & Thomas F. WALKER, 2012. "Household Shocks and Education Investment in Madagascar," Working Papers 201227, CERDI.
  2. Marcel Fafchamps & Agnes R. Quisumbing, 2003. "Social roles, human capital, and the intrahousehold division of labor: evidence from Pakistan," Oxford Economic Papers, Oxford University Press, vol. 55(1), pages 36-80, January.
  3. Michael Clemens, 2004. "The Long Walk to School: International Education Goals in Historical Perspective," Working Papers 37, Center for Global Development.
  4. Fafchamps, Marcel & Quisumbing, Agnes R., 1999. "Social roles, human capital, and the intrahousehold division of labor," FCND discussion papers 73, International Food Policy Research Institute (IFPRI).

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