Human Capital Diversification within the Household: Findings from Rural Tanzania

Helene Lilleør

No 2008-04, CAM Working Papers from University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics

Abstract: Lack of primary schooling among rural children in developing countries is often attributed to credit constraints and household demand for child labour, implying that direct and indirect costs of schooling are high. Surprisingly few studies have considered the importance of parents' expected returns of investing in their childrens human capital, despite the fact that most parents rely on their children for old-age support and subsistence. In this paper, I propose an alternative model for human capital investment based on the household, rather than the individual child, incorporating the fact that parents bear the costs of educating all their children and face uncertainty about the level and share of future returns. This uncertainty can make it optimal for parents to ensure a certain degree of human capital diversification within the household. The model implications allow me to test whether it is the need for diversification or the costs of schooling that dominate the human capital investment decision in rural households. Using extraordinary long panel data from a rural region in Northwestern Tanzania, I find strong empirical evidence of diversification effects for rural sons, but not for rural daughters. Exactly in line with what should be expected for a patrilineal society. This can potentially have far reaching policy implications.

Keywords: intergenerational contract; social compact; schooling; human capital; traditions; ethnicity; ethnic diversity; social capital; Tanzania; Africa (search for similar items in EconPapers)
JEL-codes: J13 J24 O15 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2008-08
New Economics Papers: this item is included in nep-afr, nep-dev, nep-edu and nep-hrm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.econ.ku.dk/cam/wp0910/wp0708/2008-04.pdf/ (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.econ.ku.dk/cam/wp0910/wp0708/2008-04.pdf/ [301 Moved Permanently]--> https://www.econ.ku.dk/cam/wp0910/wp0708/2008-04.pdf/)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kud:kuieca:2008_04

Access Statistics for this paper

More papers in CAM Working Papers from University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics �ster Farimagsgade 5, Building 26, DK-1353 Copenhagen K., Denmark. Contact information at EDIRC.
Bibliographic data for series maintained by Thomas Hoffmann ().