The Impact of Microcredit Loans on School Enrolment in Bangladesh

John Kandulu, Sarah Wheeler, Alec Zuo () and Nicholas Sim

Journal of Development Studies, 2020, vol. 56, issue 9, 1725-1744

Abstract: Human capital investment, especially in education, is a well-known precursor of economic growth in developing countries. In recent years, there has been a proliferation of microfinance programmes, yet evidence on whether microfinance leads to increased educational investment is tenuous at best. We utilise a large-scale cross-sectional household dataset from Bangladesh and geospatial data to study how microcredit participation and increasing microcredit incomes – that is, the extensive and intensive margins of microcredit – affects the probability of children’s school enrolment. The causal influence of microcredit participation on enrolments was estimated by utilising the propensity score matching (PSM) technique – a quasi-experimental treatment effects model. Whilst microcredit participation, the extensive margin, did not significantly influence the likelihood of school enrolment for boys, it increased girls’ enrolment. Further, microcredit income, the intensive margin, had a stronger influence on girls’ and younger siblings’ enrolment than on boys’ and older siblings’ enrolment. Omission of spatial influences can overstate microcredit influence on enrolment; while not utilising PSM can underestimate the influence of microcredit participation on enrolment. Results suggest policies that focus solely on increasing microcredit participation, without increasing the amount of microcredit incomes accessed by households, may be less effective at improving child education outcomes.

Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://hdl.handle.net/10.1080/00220388.2019.1703954 (text/html)
Access to full text is restricted to subscribers.

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:taf:jdevst:v:56:y:2020:i:9:p:1725-1744

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/FJDS20

DOI: 10.1080/00220388.2019.1703954

Access Statistics for this article

Journal of Development Studies is currently edited by Howard White, Oliver Morrissey and Ken Shadlen

More articles in Journal of Development Studies from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().