Children's Schooling in Nicaragua: What is the Link between Educational Achievement, Borrowing, and Gender?

21 Pages Posted: 29 Aug 2018

See all articles by Olga Kondratjeva

Olga Kondratjeva

Washington University in St. Louis

Joyce J. Chen

Ohio State University (OSU) - Department of Agricultural, Environmental & Development Economics

Date Written: August 2018

Abstract

The impact of credit has been widely studied, and yet little is known about the effect of formal versus informal loans. In this paper, we contrast the two and their impact on children's schooling using longitudinal data from Nicaragua. To address endogeneity, we utilize both household fixed effects and locality–year fixed effects. Our results indicate that, on average, children from borrowing households fare worse than children from nonborrowing households, with male borrowers having a disproportionately negative effect on boys, and vice versa for girls and female borrowers. Informal credit is found to have a protective effect on school attendance, but the effects of formal and informal credit on cumulative schooling are found to be statistically equivalent. However, this appears to mask considerable heterogeneity within informal borrowing.

Suggested Citation

Kondratjeva, Olga and Chen, Joyce J., Children's Schooling in Nicaragua: What is the Link between Educational Achievement, Borrowing, and Gender? (August 2018). Review of Development Economics, Vol. 22, Issue 3, pp. 1125-1145, 2018, Available at SSRN: https://ssrn.com/abstract=3240106 or http://dx.doi.org/10.1111/rode.12377

Olga Kondratjeva (Contact Author)

Washington University in St. Louis

Joyce J. Chen

Ohio State University (OSU) - Department of Agricultural, Environmental & Development Economics ( email )

2120 Fyffe Rd
Columbus, OH 43210-1067
United States

HOME PAGE: http://www.aede.osu.edu/people/chen.1276

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