Three essays on microeconometrics analysis of development in Ethiopia

Abstract

This dissertation, composed of three essays, focuses on children's educational aspirations and attendances, and household’s access to credit applying microeconometrics tools. All the three papers made use of the Young Lives data for Ethiopia. The first chapter assesses the impact of the Ethiopia's Productive Safety Net Program (PSNP) on children's educational aspirations. PSNP is a social protection program launched by the government of Ethiopia in 2005/06 with the aim of supporting food insecure rural households. Educational aspirations are important predictors of actual educational attainments and future success but in developing countries aspirations of individuals might be easily broken and led to poverty trap. This chapter explores the impacts of Ethiopia's PSNP on the educational aspirations of children. Using a longitudinal data from the Young Lives' survey in Ethiopia and applying a differences-in-differences methodology, it was found that the program increases educational aspirations of children. Furthermore, aspirations are found to predict future educational attainments. The results indicate that safety-net programs might have important spillover effects on education. The second paper explores the possible effects of mobile phones adoption on the credit uptakes of the rural poor who are mostly neglected from the formal credit markets but finance their credit demand from informal sources including relatives/friends. Mobile phones are one of the few ICT innovations that have found their way in to the hands of the poor residing in remote and rural areas. Empirical evidences generally document the positive role mobile phones play in facilitating the development efforts of poor households. The data are obtained from Young Lives Ethiopia, and a probit, tobit and special regressor estimator are employed. The econometric results suggest mobile phones are positively associated with the credit uptake of rural households specially credit uptake from informal sources. Thus, policy makers and financial providers working on providing credit in rural areas need to exploit the use of mobile phones in reaching out the rural poor. The third paper, however, investigates the impacts of violent intra-state conflicts on the educational enrollments and aspirations of children. Using data from Young Lives and complemented with geo-referenced data from Armed Conflict Locations and Events Data (ACLED) on conflict events, a region-by-region analysis is conducted and the treatment and control groups are determined by the distance that household is located from the nearest conflict event. Heterogeneous results are obtained: null result is obtained for Oromia and Tigray regions but the conflict is found to have a negative effect on educational enrollments in Amhara region and on educational aspirations in SNNP region.