Educating Children: a Look at Household Behaviour in Côte d’Ivoire

Philippe De Vreyer, Sylvie Lambert and Thierry Magnac

No 99-13, Documents de recherche from Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne

Abstract: We consider a dynamic model of investment in human capital where one decision maker (the head of the household) builds up human capital stocks of his/her children. In a stochastic framework, tradeoffs between investments in (physical) assets and investments in human capital achieved by different children within the family are modelled as resulting from risk diversification and differing opportunity costs of investments. We show how to specify the structural model as a system of simultaneous discrete choice equations so that it is estimable using panel or cross section data on children' school attendance. We estimate structural parameters using data from the cote d'Ivoire in 1985/ 1986 using standard and simulated maximum likelihood techniques. Results indicate that returns to learning by doing are much larger than returns to school at least at young ages, that the estimated intertemporal substitution elasticity is quite large and that the elasticity of substitution between financial and human capital assets is negative.

Keywords: Intertemporal choices; human capital formation; discrete simultaneous equations; simulated ML; economic development (search for similar items in EconPapers)
JEL-codes: C15 C35 D91 I21 J24 O15 (search for similar items in EconPapers)
Pages: 58 pages
Date: 1999
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Citations: View citations in EconPapers (2)

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