Child Schooling in Peru: Evidence From A Sequential Analysis of School Progression

Primary enrolment rates are very high in Peru, but so are the failure and drop-out rates, especially beyond the primary level. Thus an analysis of child schooling should take account of the conditional sequence with the previous level and self-selection into the next higher level of schooling. This cannot be done using standard univariate or ordered logit/probit models of school enrolment/grade attainment. This paper applies a unique correlated sequential probit model with unobserved individual specific heterogeneity to determine the nature of school progression at primary, secondary and post-secondary levels in Peru. This entails richer results, argued to be better than the standard static estimates. In particular, parental education, household expenditure, sibling composition and local adult market participation rates are found to affect different levels of schooling differently. While parental education is crucial for child school enrolment at the primary level, sibling composition and household expenditure turn out to be significant for attainment at the secondary level. However, grade repetition at primary and secondary levels and market participation rates are important for a child to move on to the post-secondary levels.