Essays on human capital investments in developing countries

This dissertation encompasses three chapters that explore determinants of parental investments in their children???s health and education in developing countries. Below are the individual abstracts for each chapter. Chapter 1: Child Ability, Parental Investments and Child Nutrition in Ecuador This paper investigates the role of family composition and child cognitive ability in explaining how resource-constrained households make nutritional investment decisions in their children. Parents have private information about their children???s abilities and health that is typically not available to researchers. I use a unique panel household dataset from Ecuador???s Bono de Desarrollo Humano that contains a measure of child cognitive ability and allows me to estimate its affect on resource allocation. I address reverse causality due to the effects of investments on ability and I use within household fixed effects to look at children to look at the intra-household investment decision. Findings point to the existence of sibling rivalry due to resource constraints; children with more siblings, and children in poor households, are less likely to eat high-quality food. Children with higher abilities are less likely to share a nutritional supplement with another family member, suggesting that parents must decide how to invest their limited resources, and child ability informs that decision. Within households of more than one child, children with higher abilities are more likely to eat higher quality foods than their siblings, even after controlling for child body size. Chapter 2: Child Ability and Household Human Capital Investment Decisions in Burkina Faso Using data we collected in rural Burkina Faso, we examine how children???s cognitive abilities influence resource constrained households??? decisions to invest in their education. We use a direct measure of child ability for all primary school-aged children, regardless of current school enrollment. We explicitly incorporate direct measures of the ability of each child???s siblings (both absolute and relative measures) to show how sibling rivalry exerts an impact on the parent???s decision of whether and how much to invest in their child???s education. We find children with one standard deviation higher own ability are 16 percent more likely to be currently enrolled, while having a higher ability sibling lowers current enrollment by 16 percent and having two higher ability siblings lowers enrollment by 30 percent. Results are robust to addressing the potential reverse causality of schooling influencing child ability measures and using alternative cognitive tests to measure ability. Chapter 3: Risk and Protective Factors for School Dropout in Mexico and Chile Fourteen percent of Chilean youth and 30 percent of Mexican youth have dropped out prior to completing secondary school. Of these youth, 90 to 97 percent are considered ???at risk,??? meaning that they engage in or are at risk of engaging in risky behaviors that are detrimental to their own development and to the well-being of their societies. This paper uses youth surveys from Chile and Mexico to demonstrate that early school dropout is strongly correlated with a range of risky behaviors as well as typically unobservable risk and protective factors. We test which of a large set of potential factors are correlated with dropping out of school early and other risky behaviors. These factors range from relationships with parents and institutions to household behaviors (abuse, discipline techniques) to social exclusion. We use stepwise regressions to sort out which variables best explain the observed variance in risky behaviors. We also use a non-parametric methodology to characterize different sub-groups of youth according to the amount of risk in their lives. We find that while higher socioeconomic status emerges as key explanatory factors for school dropout and six additional risky behaviors for boys and girls in both countries, it is not the only one. A good relationship with parents and peers, strong connection with local governmental institutions and schools, urban residence, younger age, and spirituality also emerge as being strongly correlated with school dropout and different risky behaviors. Similarly, young people that leave school early also engage in other risky behaviors. The variety of factors associated with leaving school early suggests that while poverty is important, it is not the only risk factor. This points to a wider range of policy entry points than currently used, including targeting parents and the relationship with schools