What is it about?
The paper looks at the effect schooling has had on household welfare in Sri Lanka during the 1990-2006 period on average and between the rich and poor. It uses household data and recent econometric techniques to address the problem of 'endogeneity' endemic to such investigations. The results show that an extra year of schooling on the part of the most educated adult member in the household can increase welfare (proxied by real per capita consumption expenditure) by 3.8 per cent on average. However, the effect varies considerably across the welfare distribution with the highest impact among poorer households.
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Why is it important?
Schooling has a higher impact on the welfare of poorer households than richer households. This result is different to findings in the literature that tend to show larger effects among richer households when endogeneity is uncorrected.
Perspectives
The results show that schooling benefits the welfare of poorer households more than it does the rich. This is an important result in the context of using education expansion as a tool to reduce inequalities in a post-war context. But the interesting question the study also raises is what really drives higher welfare among the richer households? Is it better quality of schooling, network effects or positively assortative mating trends?
Rozana Himaz
Oxford Brookes University
Read the Original
This page is a summary of: Schooling and household welfare: The case of Sri Lanka from 1990 to 2006, Review of Development Economics, October 2017, Wiley,
DOI: 10.1111/rode.12355.
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