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Monday, 5 January 2009

On food prices and children schooling...

A new paper sheds further light on the relation between food prices and children schooling drawing on empirical evidence from Burkina Faso. The conclusions have important implications for policy development for education and agriculture :

In this paper I analyzed the impact of a drought and resulting food price inflation on parental decisions to send their children to school. Moreover, I used the fact that in Burkina Faso food crop farmers and cotton farmers where exposed differently to that shock to estimate the income elasticity of school enrolment.

The results suggest that the loss of purchasing power, even if temporary, can have a severe impact on children’s schooling. Between 1994 and 1998 Burkinab`e food crop farmers experienced on average a decline of more than 30 percent in their income. This led to a substantial cut in their spending on education and a drop of more than ten percent in enrolment rates. This corresponds to more than 100,000 children which were not enrolled or were withdrawn from school during that period. In other words, instrumental variable estimates suggest that a decline in income by ten percent causes a decline in enrolment rates among children six to thirteen years old by about 2.2 to 2.8 percentage points, i.e. this impact is three to four times higher than what a simple OLS regression would suggest.

This is a further piece of evidence that income matters for children’s school enrolment. However, so far existing evidence comes mostly from developed countries or from Latin-America and South-Asia, and is often based on an analysis of conditional cash transfer programs. Given the conditionality in these latter programs it is generally difficult to derive from them the direct effect of parental income. In addition, it is unlikely that these results can be generalized to the context of Sub-Saharan Africa. Given that this region has by far the lowest education levels in the world, the results from this paper might be particularly relevant.

In the coming years substantial resources will be spent on programs to increase school enrolment rates in Sub-Saharan Africa. The results of this study suggest that decision-makers should not only focus on the supply side of education, like school construction and the training of teachers, but should also implement measures to strengthen the demand side. That can be done directly by providing cash transfers to households or indirectly by undertaking interventions which help increase the incomes of poor rural households. This can include investments in rural infrastructure, agricultural productivity and the provision of opportunities to diversify income sources. Of course the study also highlights that measures which help households to smooth income over time can prevent children from dropping out of school if households face negative income shocks. Time is pressing. In Burkina Faso for instance, between June 2007 and June 2008 cereal consumer prices rose again by 110.1%.

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