Risk and Time Preference on Schooling:Experimental Evidence from a Low-Income Country

Yuki Tanaka and Takashi Yamano
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Yuki Tanaka: National Graduate Institute for Policy Studies

No 14-24, GRIPS Discussion Papers from National Graduate Institute for Policy Studies

Abstract: Educational investment involves risks and long-term commitment, and the degree of risk aversion or patience of parents could play a vital role in the schooling decision. Yet, there are few studies analyzing the impact of such preferences on educational investment. This paper utilizes a unique dataset with a large-scale field experiment of preferences and estimates the impacts of the patience and risk aversion of the parents on school attendance, delayed enrollment, and the education expenditure of their children in Uganda. Our results show that the risk aversion of the parent delays enrollment of young children, especially boys. This could be explained by parents’ security concerns for their young children. Girls of impatient parents have high attendance rates when they are young (6 – 9 years old) but have low attendance rates when they are older (10 – 13 years old). Boys aged 10 to 13 have low attendance rates if their parents have a high present bias. Finally, the patience of the parents increases the education expenditure.

Pages: 35 pages
Date: 2015-01
New Economics Papers: this item is included in nep-cbe, nep-edu and nep-exp
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:ngi:dpaper:14-24

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