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Present Bias and Underinvestment in Education? Long-run Effects of Childhood Exposure to Booms in Colombia

Bladimir Carrillo

No 2019.07, Working Papers from Fondazione Eni Enrico Mattei

Abstract: This paper examines the long-run impacts of income shocks by exploiting variation in coffee cultivation patterns within Colombia and world coffee prices during cohorts' school-going years in a differences-in-differences framework. The results indicate that cohorts who faced higher returns to coffee-related work during school-going years completed fewer years of schooling and have lower income in adulthood. These findings suggest that leaving school during temporary booms results in a significant loss of long-term income. This is consistent with the possibility that students may ignore or heavily discount the future consequences of dropout decisions when faced with immediate income gains.

Keywords: Information Avoidance; Energy Efficiency; Moral Wiggle Roo (search for similar items in EconPapers)
JEL-codes: J24 O12 O13 (search for similar items in EconPapers)
Date: 2019-05
New Economics Papers: this item is included in nep-dev, nep-lma and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Working Paper: Present Bias and Underinvestment in Education? Long-run Effects of Childhood Exposure to Booms in Colombia (2019) Downloads
Working Paper: Present Bias and Underinvestment in Education? Long-run Effects of Childhood Exposure to Booms in Colombia (2019) Downloads
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