Household Shocks and Education Investment in Madagascar

This paper measures the extent to which households in Madagascar adjust children’s school attendance in order to cope with exogenous shocks. We model the household’s decisions to enroll children in school, and remove them from school, and measure the impact on these decisions of shocks to household income, assets and labor supply. In order to explore these questions more fully, we use a unique dataset with ten years of recall data on school attendance and household shocks. We estimate hazard models of school entry and exit, and measure the effect of shocks on these decisions. The probability of dropping out of school is significantly increased when a child’s household experiences an illness, death or asset shock. The presence of a health and nutrition program in the local school is associated with earlier school entry and reduced probability of dropout among enrolled students.