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Stronger together? Shocks, educational investment, and self-help groups in Tanzania

Francisco M. P. Mugizi ()
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Francisco M. P. Mugizi: University of Dar es Salaam

Journal of Social and Economic Development, 2022, vol. 24, issue 2, No 14, 548 pages

Abstract: Abstract Do income shocks affect educational investment? Can self-help groups or Savings and Credit Cooperative Organizations (SACCOs) mitigate the impact of shocks on educational investment? Using nationally representative panel data from Tanzania, I find that educational investment suffers because of income shocks. On a whole, I find that income shock is negatively correlated with educational investment measured in per school-age child educational expenditure. However, I find no strong evidence to suggest that self-help groups and SACCOs buffer against income shocks. This suggests that locally available buffering mechanisms such as self-help groups and SACCOs do not necessarily help households to cushion against income shocks partly because many of the shocks affect most people in a given locality. Therefore, relying solely on the local mitigating mechanisms may not be a good option. This calls for a need to design policies that would enable households to insure themselves beyond their local insurance mechanisms. Public insurance and social safety nets programs may help households to overcome income shocks.

Keywords: Shocks; Educational investment; Self-help groups; SACCOs; Tanzania (search for similar items in EconPapers)
JEL-codes: D1 G20 I25 O1 O16 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s40847-022-00183-3

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