The Dynamics of School and Work in Rural Bangladesh

This paper investigates the causes underlying the poor school performance of children in rural Bangladesh, while focusing on the effect of work on school progress. To this end, a dynamic switching model is presented for the sequence of school and work outcomes up to the end of secondary school, where the switching in each school level considered is determined by the endogenous work sequence up to that level. This approach allow us to characterize the full sequence of school and work choices of children, and to evaluate the dynamic effects of work on schooling. We find that work has a negative and sizable effect on school progress for the entire population, as well as for all the subpopulations considered, including the different groups of working children. We are also able to identify at each school level the observable and unobservable characteristics of working children relative to those of non-working children. This characterization and the magnitude of the estimated effects of work have important policy implications.