Julia Garlick, Yale University
Occupation Choices and Education Investments: Unintended Effects of Microcredit
Date and Location
Wednesday, February 24, 2016, 4:10 PM - 5:30 PM
ARE Library Conference Room, 4101 Social Sciences and Humanities
This paper demonstrates the existence of negative effects from microcredit on education outcomes. Among households that start a business as a result of the introduction of a microcredit lender, school enrollment for adolescents declines significantly. To understand the mechanisms driving this result, I develop and estimate a structural model of joint occupation and education choice with heterogeneous households that face frictions in the credit and labor market. Using data on the Thai Million Baht Village Fund program, I find that this quasi-experimental program induces increased self employment and decreased school enrollment among high productivity poor households, which has long-run implications for children’s future wage earnings. Their decreased enrollment is offset at the aggregate level by increased enrollment by less productive households. I show in counterfactual simulations that the former can be mitigated by making loans conditional on continued school enrollment. However, such policies must be carefully designed to allow borrowing by ultra-poor households whose children are already out of school.
Subscribe to Upcoming Seminars
Individual seminar and workshop announcements are circulated via separate mailing lists. To subscribe, send an email to the relevant list:
- Click here to subscribe to the Departmental Seminars.
- Click here to subscribe to the Agricultural Economics Workshop.
- Click here to subscribe to the Development Workshop.
- Click here to subscribe to the Econometrics Seminars.
- Click here to subscribe to the Environmental and Resource Economics Workshop and the Environmental and Energy Economics Workshop.
Contact Us2116 Social Sciences and Humanities
University of California, Davis
One Shields Avenue
Davis, CA 95616
Main Office: 530-752-1515
Student Advising Services: 530-754-9536
DeLoach Conference Room: 530-752-2916
Main Conference Room: 530-754-1850