In this paper, I adopt the framework of household utility and labor supply to derive a model for the impact of income schools on school attainment in Guatemala using household data retrieved from the World Bank’s Living Standards Measurement Survey (LSMS). To test my model, I run a probit regression using my unique household data which includes a number of independent variables that capture household and community-level characteristics. Then, the models are interpreted using the labor supply graphs. I find empirical support that income shocks affect the household’s consumption between education and labor. I also find that the tradeoff is different for richer households. In an effort to further explore the relationship, a second model is used which reveals significant findings regarding depravations that households located in rural areas face. An income threshold is found which supports my hypothesis that rich and poor households respond to income shocks differently. These findings are applied to the labor supply theory which gives an insight into the household’s decision-making process when considering the consumption of schooling and child labor. Education not only results in greater marginal household utility but it also impacts the education of later generations.
Global and International Studies
De Leon, Jorge, "How Do Income Shocks Affect Schooling In Guatemala? Using Household Data To Examine Tradeoffs Between Child Labor And Education" (2020). Senior Independent Study Theses. Paper 8938.
Economics | Growth and Development | Income Distribution | Labor Economics
Child labor and education, Guatemala
Bachelor of Arts
Senior Independent Study Thesis
© Copyright 2020 Jorge De Leon