Luận Văn Household education and earnings Evidence from rural Peru by Laszlo, Sonia Catherine (2002)

Household education and earnings: Evidence from rural Peru



This dissertation investigates the returns to education for households in rural Peru. In these and similar areas of the developing world, economic activity is typically observed at the household rather than at the individual level. Estimating the returns to education and other labour supply parameters becomes a complicated task of identification when the majority of income is derived from household level ventures such as farming and non-farm self-employment activities. This task is further complicated by imperfections in local markets, such as job rationing and poor access to markets. As a result, wages are not observed for a substantial proportion of economic activity. After a description of education in rural Peru in the first essay, the analysis turns to an investigation of the channels through which education affects earnings at the household level. Issues of aggregation over household members are discussed in the second essay. The analysis reveals that an allocative effect dominates education's effect on household earnings: households with more educated members are more likely to diversify their sources of income and generate more income from non-subsistence and non-farm activities. The last essay decomposes household earnings returns to schooling into various structural parameters of labour supply behaviour. In particular, this essay develops a simple methodology that allows the estimation of wage-dependent parameters, such as the elasticity of labour supply and the wage returns to education, when wages are unobservable. This analysis exploits regional variation in access to and the development of local markets in the problem of identification. Results indicate that education affects earnings disproportionately to its effect on hours. Thus, the results provide evidence of wage returns to education in rural Peru. Furthermore, the evidence provided in this dissertation quantifies the role of local market development in the determination of the returns to education. In more developed areas, education facilitates access to lucrative opportunities. These opportunities provide better wages and better hours than those in more isolated areas that depend more on subsistence agriculture. As a result, the interaction between education and local market development improves household welfare by increasing earnings and the consumption of leisure.
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[TH]Format:[/TH]
[TD]Dissertation[/TD]
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[TH]Author(s):[/TH]
[TD]Laszlo, Sonia Catherine[/TD]
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[TH]Published:[/TH]
[TD]2002[/TD]
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[TH]Language:[/TH]
[TD]English[/TD]
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