Household schooling decisions and conditional cash transfers in rural Nicaragua
This paper will examine the difference in household schooling decisions in agricultural versus other households in rural areas in Nicaragua. The hypothesis is that families involved only in agriculture will experience higher costs and lower perceived returns to schooling than other families and therefore demand less education overall than other families. This paper with also investigate the differences between agricultural and non-agricultural households in the context of the education incentives offered by Nicaragua's Red de Protección Social (RPS). Data analysis indicates a lower initial demand for education but a greater effect of the RPS program on school outcomes among households involved only in agriculture. This suggests that the RPS program created adequate incentives to compensate for the lower perceived net benefits to schooling among agricultural households to change their allocation of resources to increase investments in education.
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