Social Interactions and Schooling Decisions
University of Zurich
University of Lausanne - Department of Economics (DEEP); Institute for the Study of Labor (IZA); CESifo (Center for Economic Studies and Ifo Institute for Economic Research)
CEPR Discussion Paper No. 5816
The aim of this paper is to study whether schooling choices are affected by social interactions. Such social interactions may be important because children enjoy spending time with other children or parents learn from other parents about the ability of their children. Identification is based on a randomized intervention that grants a cash subsidy encouraging school attendance among a sub-group of eligible children within small rural villages in Mexico. Results indicate that (i) the eligible children tend to attend school more frequently, (ii) but also the neligible children acquire more schooling when the subsidy is introduced in their local village, (iii) social interactions are economically important, and (iv) they may arise due to changes in parents' perception of their children's ability.
Number of Pages in PDF File: 45
Keywords: Peer effects, schooling, field experiment, PROGRESA
JEL Classification: C93, I21, I28working papers series
Date posted: October 13, 2006
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