REGULAR ARTICLE
Children's schooling in Nicaragua: What is the link between educational achievement, borrowing, and gender?
Olga Kondratjeva,
Joyce J. Chen,
Corresponding Author
Olga Kondratjeva
Center for Social Development, Washington University in St. Louis, St. Louis, MO
Correspondence
Center for Social Development, Washington University in St. Louis, St. Loius, MO.
Email: [email protected]
Search for more papers by this authorJoyce J. Chen
Department of Agricultural, Environmental and Development Economics, The Ohio State University, Columbus, OH
Institute of Labor Economics (IZA), Bonn, Germany
Search for more papers by this authorOlga Kondratjeva,
Joyce J. Chen,
Corresponding Author
Olga Kondratjeva
Center for Social Development, Washington University in St. Louis, St. Louis, MO
Correspondence
Center for Social Development, Washington University in St. Louis, St. Loius, MO.
Email: [email protected]
Search for more papers by this authorJoyce J. Chen
Department of Agricultural, Environmental and Development Economics, The Ohio State University, Columbus, OH
Institute of Labor Economics (IZA), Bonn, Germany
Search for more papers by this authorAbstract
The impact of credit has been widely studied, and yet little is known about the effect of formal versus informal loans. In this paper, we contrast the two and their impact on children's schooling using longitudinal data from Nicaragua. To address endogeneity, we utilize both household fixed effects and locality–year fixed effects. Our results indicate that, on average, children from borrowing households fare worse than children from nonborrowing households, with male borrowers having a disproportionately negative effect on boys, and vice versa for girls and female borrowers. Informal credit is found to have a protective effect on school attendance, but the effects of formal and informal credit on cumulative schooling are found to be statistically equivalent. However, this appears to mask considerable heterogeneity within informal borrowing.
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