Impacts of Household Credit on Education and Healthcare Spending by the Poor in Peri-urban Areas in Vietnam
There is debate about whether microfinance has positive impacts on education and health for borrowing households in developing countries. To provide evidence for this debate we use a new survey designed to meet the conditions for propensity score matching (PSM) and examine the impact of household credit on education and healthcare spending by the poor in peri-urban areas of Ho Chi Minh City, Vietnam. In addition to matching statistically identical non-borrowers with borrowers, our estimates also control for household pre-treatment income and assets, which may be associated with unobservable factors affecting both credit participation and the outcomes of interest. The PSM estimates of binary treatment effect show significant and positive impacts of borrowing on education and healthcare spending. However, multiple ordered treatment effect estimates reveal that only formal credit has significant and positive impacts on education and healthcare spending, while informal credit has insignificant impacts on the spending.
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- Rajeev H. Dehejia & Sadek Wahba, 2002.
"Propensity Score-Matching Methods For Nonexperimental Causal Studies,"
The Review of Economics and Statistics,
MIT Press, vol. 84(1), pages 151-161, February.
- Rajeev H. Dehejia & Sadek Wahba, 1998. "Propensity Score Matching Methods for Non-experimental Causal Studies," NBER Working Papers 6829, National Bureau of Economic Research, Inc.