The Role of Schooling in Skill Development: Evidence from Young Lives in Ethiopia, India, Peru and Vietnam

The expansion of schooling in developing countries has improved educational access significantly in recent years, but raises questions about what is learned in school and how this relates to the development of productive skills of value in formal and informal labour markets. Young Lives has collected data since 2002 on two cohorts of children born in 1994-95 and 2000-01 across 80 sites in four developing countries. This paper employs these data to examine the development of general cognitive skills and of basic literacy and numeracy over the child's life course and school career from ages 8 to 15, linking skills development to the advantages afforded by household resources, early nutrition, caregiver literacy, and experience of schooling. It finds that early enrolment in school benefits children in disadvantaged contexts, especially Ethiopia, and that while early advantage at the household is a key determinant of skill acquisition in all four countries, there is evidence that schooling can compensate for this to some extent, especially at the basic education level, so that disparities at age 12 are lower than at younger ages. However, inequalities in skill development appear to strengthen again during the later years of schooling along established lines of household disadvantage, when pressures to dropout, especially because of rising costs including opportunity costs of labour, begin to rise