Essays on Development Economics
Open Access DepositedThis dissertation consists of three essays covering four major areas of development economics: poverty, education, access to credit and gender equality. The first essay examines the possibility of a low-income trap due to parental choice of madrassas for children’s education, which in turn may result in intergenerational persistence in madrassa education, i.e., a madrassa trap. Using data from Indonesia Family Life Survey (IFLS) 2007, I estimate a school choice model and a Mincerian earnings function to test the madrassa trap hypothesis. I use rainfall variation as an instrument for household income to estimate the causal effect of household income on madrassa enrollment. The estimated income effect shows that doubling the average level of per capita household expenditure reduces children’s probability of madrassa enrollment by about 34 percentage points. To estimate the earnings function, I take advantage of recent econometric approaches that tackle biases in the absence of valid external instruments. I find that average earnings of junior general school graduates are about 26.5 percent higher than that of junior madrassa graduates. The combination of the negative income effect on madrassa enrollment and lower returns to madrassa education indicates that there is a madrassa trap. The second essay estimates the effect of access to credit and education on women's participation in household decision making and whether education complements access to credit in changing women's participation rate. I use the Bangladesh Demographic and Health Survey (BDHS) 2011 to identify these effects. To overcome potential biases, along with the other methods, I use minimum biased (MB) estimator of Millimet and Tchernis (2013) that minimizes the bias in treatment effect in the presence of selection on unobservables. The estimates from different methods suggest that access to credit has small but positive effects on women's participation in household decision making. Education also has positive effects, but the results do not support complementarity between access to credit and education. The third essay investigates whether son preference translates into selective abortion and account for any of the “missing women” in Bangladesh. A competing risk hazard model is used to examine the existence of sex selective abortion. Data suggest that son preference leads to shorter birth intervals if previous births are girls. If, for example, the first birth is a girl, the hazard of having another child each quarter is about 15 percent higher for more educated urban women in recent years (1990-2011). However, there is no evidence that selective abortion contributes to missing women in Bangladesh.
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