RIEB Discussion Paper Series No.2025-19

Title

Does the Timing of Productivity Shocks in Childhood Affect Educational Attainment?

Abstract

Poor households often face trade-offs between child labor and education. Using data from pastoralists in Kenya and Ethiopia, where livestock require care and thus generate child labor demand, I leverage quasi-random variations in rangeland health—affecting both household income and labor demand—to estimate the impact of productivity shocks during childhood on educational attainment. The results reveal asymmetric effects based on the timing and nature of shocks: cumulative positive shocks during preschool years are associated with increased educational attainment, driven by a higher likelihood of entering primary school, likely through relaxing short-term budget constraints. On the other hand, severe negative productivity shocks during mid-primary school ages, when children typically drop out, has positive effect despite asset losses, likely due to subsequent reduced child labor demand for boys in animal husbandry. These findings highlight the importance of both income and child labor demand in shaping human capital investment during critical periods in developing countries.

Keywords

Human capital; Child labor; Opportunity cost; Agricultural households

Inquiries

Yuma NORITOMO*
Charles H. Dyson School of Applied Economics and Management, Cornell University
Junior Research Fellow, RIEB, Kobe University

*This Discussion Paper won the Kanematsu Prize (FY 2024).