Education as a Precautionary Asset

Angela Cipollone ()
Additional contact information
Angela Cipollone: Department of Ecoomics and Finance, LUISS University

No 1108, Working Papers CELEG from Dipartimento di Economia e Finanza, LUISS Guido Carli

Abstract: By using data from the latest wave of the Indonesia Life Family Survey, this paper investigates whether child time allocation depends on the joint impact of liquidity constraints, risk attitudes and time preferences. We employ a double selection model of school hours to control for endogeneity of borrowing constraints and sample selection in school enrolment. Our measures of time preferences and risk attitudes are elicited from individuals’ responses to hypothetical gambles, and households’ risk profile is proxied by the past occurrence of shocks. It will be shown that, under liquidity constraints, risk averse parents raise a precautionary demand for education as an ex-ante risk coping strategy in order to insure future consumption through higher returns from children’s work.

JEL-codes: D10 D91 J01 J22 (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-edu, nep-hrm, nep-lab and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://static.luiss.it/RePEc/pdf/celegw/1108.pdf (application/pdf)

Related works:
Working Paper: Education as a precautionary asset (2011)
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:lui:celegw:1108

Access Statistics for this paper

More papers in Working Papers CELEG from Dipartimento di Economia e Finanza, LUISS Guido Carli Contact information at EDIRC.
Bibliographic data for series maintained by Paolo Giordani ( this e-mail address is bad, please contact ).