Credit Constraints in Higher Education Attendance: Longitudinal Evidence from Ethiopia

Godstime O. Eigbiremolen and Anthony Orji

Working Papers from African Economic Research Consortium

Abstract: This paper examines the household wealthhigher education attendance relationship and the evidence on credit constraints in post-secondary schooling. Using unique longitudinal data that link household wealth and measures of cognitive ability age 12 years to higher education attendance at age 1922 years, we differentiated short-term credit constraints from long-term credit constraints and directly tested the relative importance of short and long-term credit constraints in schooling decision. We found that both short-term and long-term credit constraints determine the household wealthhigher education attendance relationship. Therefore, we recommend complementing short-term policies like financial aid with long-term interventions that empower households to continue to invest in human capital development over the childs life cycle, which will crystalize in higher cognitive ability and readiness for higher education.

Date: 2024-08-22
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Note: African Economic Research Consortium
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