UC Davis Agricultural and Resource Economics

Diane Charlton, University of California, Davis

Education Accelerating the Agricultural Transition: Panel Data Analysis of Rural Mexico

Date and Location

Monday, December 8, 2014, 4:10 PM - 5:30 PM
ARE Conference Room, 2102 Social Sciences and Humanities

Abstract

A critical stage in economic development is the structural shift from a primarily agricultural economy to non-agricultural. This shift is currently underway in rural Mexico. Simultaneously, the national government is investing in building secondary schools in rural communities. I use exogenous shifts in access to secondary schools as an instrumental variable with a di fferences-in-di fferences approach to identify the marginal impact of a year of education on the probability of working in agriculture and the probability of migrating as an adult. I find that an additional year of education reduces the probability of working in agriculture at age 20 by 4.9 percentage points on average, and the magnitude of the impact increases as workers age up to 7 percentage points at age 30. An additional year of school is associated with a 0.5 percentage point increase in the probability of working away from home all year in the naive OLS regression, but the results are not signifi cant in the IV specifi cation. These findings show that investing in education can accelerate the transition of labor out of agricultural, which likely has important welfare-improving e ffects at the individual and household level. However, I do not find signi ficant impacts of education on labor mobility.

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