Household Shocks and Education Investment in Madagascar

28 Pages Posted: 30 Dec 2014

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This paper measured the extent to which households in Madagascar adjust children's school attendance in order to cope with exogenous shocks to household income, assets and labour supply. Our analysis was based on a unique data set with 10 years of recall data on school attendance and household shocks. We found that the probability of a child dropping out of school increased significantly when the household experienced an illness, death or asset shock. We proposed a test to distinguish whether the impact of shocks on school attendance could be attributed to credit constraints, labour market rigidities, or a combination of the two. The results of the test suggested that credit constraints, rather than labour market rigidities, explain the inability of households in Madagascar to keep their children in school during times of economic distress.

Keywords: education, development, household shocks, time allocation, labor supply, Madagascar

JEL Classification: I25, J22, D13, E24

Suggested Citation

Glick, Peter and Sahn, David E. and Walker, Thomas F., Household Shocks and Education Investment in Madagascar. IZA Discussion Paper No. 8731, Available at SSRN:

Peter Glick (Contact Author)

RAND Corporation ( email )

1200 South Hayes Street
Arlington, VA 22202
United States

David E. Sahn

Cornell University ( email )

B16 MVR Hall
Ithaca, NY 14853
United States
607-255-8931 (Phone)
607-255-0178 (Fax)


Thomas F. Walker

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

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