Essays On Earnings And Human Capital In Kenya

Author : Joan Hamory Hicks
Publisher :
ISBN 13 :
Total Pages : 210 pages
Book Rating : 4.:/5 (785 download)

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Download or read book Essays in Development Economics written by Joan Hamory Hicks and published by . This book was released on 2009 with total page 210 pages. Available in PDF, EPUB and Kindle. Book excerpt: According to the World Bank's World Development Report 2007, there are 1.3 billion young adults aged 12-24 living in less-developed countries today. Individuals in this age group are going through a period of tremendous flux in their lives as they embark on marriage, job searches or higher education, and their experiences during this time will shape the next generation of decision makers. Research focusing on the choices of these individuals, as well as the circumstances under which they are made, is urgently needed. The present collection of essays seeks to advance such research by utilizing a recent longitudinal survey to examine the decisions of young adults in rural Kenya as they relate to education, migration and behavior in the wake of violent civil conflict. Chapter 1 explores the extent to which individual academic and cognitive ability is factored into household decisions concerning education. Panel information on schooling for nearly 1,900 rural Kenyan youth over the period 1998-2008 is combined with satellite precipitation data in order to examine the effects of agricultural income variability on school attendance. A unique early-age academic test score proxies for child ability. Regression analysis indicates that during times of plenty, there is an 11 percent increase in attendance of high ability relative to low ability individuals, suggesting households recognize and value ability when making schooling decisions. This finding is framed using a model of human capital accumulation in which schooling decisions are a function of individual ability. Surprisingly, although youth on the whole are less likely to attend school during negative income shocks, there are no differential attendance changes across individuals of different ability levels. Instead, credit constraints and income shocks may work together in this setting to limit desirable human capital investments. Such consumption smoothing behavior could imply negative long-term effects on household welfare. Chapter 2 studies selective migration among 1,500 Kenyan youth originally living in rural areas. In particular, this essay examines whether migration rates are related to individual "ability", broadly defined to include cognitive aptitude as well as health, and then uses these estimates to determine how much of the urban-rural wage gap in Kenya is due to selection versus actual productivity differences. Whereas previous empirical work has focused on schooling attainment as a proxy for cognitive ability, the present research employs an arguably preferable measure, a pre-migration primary school academic test score. Pre-migration randomized assignment to a deworming treatment program provides variation in health status. Results suggest a positive relationship between both measures of human capital (cognitive ability and deworming) and subsequent migration, though only the former is robust at standard statistical significance levels. Specifically, an increase of two standard deviations in academic test score increases the likelihood of rural-urban migration by 17%. In an interesting contrast with the existing literature, schooling attainment is not significantly associated with urban migration once cognitive ability is accounted for. Accounting for migration selection due to both cognitive ability and schooling attainment does not explain more than a small fraction of the sizeable urban-rural wage gap in Kenya, suggesting that productivity differences across sectors remain large. Finally, Chapter 3 examines the socioeconomic impacts of two months of protests and violent, primarily ethnic-based clashes that erupted across central and western Kenya in late 2007 following the controversial conclusion of a heavily-contested presidential election. Although not an epicenter of the conflict, Busia District experienced sporadic unrest, an influx of refugees from other parts of Kenya, inflation, supply shortages, and local market closures. Unique and timely survey data collected from young adults living primarily in this district of rural western Kenya in the months surrounding the election permits the use of both differences-in-differences and propensity score matching methodologies to estimate the short- to medium-run impacts of this conflict, and both approaches yield broadly similar findings. Despite little support for lasting effects on labor, migration and nutritional outcomes within weeks of cessation of the violence, there do appear to be persistent consequences for social cohesion and informal financial activities. While there is little indication of change in survey respondents' self-reported attitudes regarding trust of others, analysis confirms large declines in attendance at religious services, participation in community and bible groups, and utilization of non-family members as points of contact for future survey enumeration efforts. These findings highlight a disconnect between reported attitudes and observable behavior. Furthermore, respondents are between 29 and 53 percent less likely to engage in informal lending and transfers post-conflict. Given the key role played by social networks in informal financial markets in less-developed countries, these results indicate that even brief civil unrest may have lasting negative consequences.