Working Papers
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Trading Off Human Capital versus Productive Asset Investment:
Perceptions of Risk and Return
(Job Market Paper)
PAP: AEARCTR-0017654
Abstract
This paper studies a fundamental trade-off faced by low-income households in developing countries: whether to invest in productive assets to improve productivity and build resilience, or to invest in human capital to enable entry into the skilled labor market. We study quantitatively how perceptions of risk and returns associated with climate change and structural transformation affect investment decisions. We conduct two field experiments with over 2,000 pastoralist parents in rural Kenya and Ethiopia: a hypothetical choice experiment to estimate parental preferences and subjective beliefs over their children's future education, occupation, and livestock production, and an information intervention that exogenously shifts beliefs about these returns to examine how households adjust actual investment decisions. Together, these analyses allow us to test and quantify how risks associated with productive assets shape human capital investment.
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Long-run Effects of Temporary Catastrophic Drought Insurance Coverage
Slides World Bank Blog
Abstract
We study the long-run effects of temporary catastrophic drought insurance on pastoralist households in Kenya and Ethiopia. Instrumenting for insurance purchase with randomized premium discounts, we estimate impacts of insurance coverage on households re-surveyed a decade later. Effects depend on baseline herd size. Among households with smaller herds, insurance reduced holdings of small, liquid livestock such as goats—typically held as a precautionary reserve—by 67 percent, freeing resources for crop production and driving a sharp long-run rise in children's education, reflecting reduced child labor demand for herding. Among households with larger herds, insurance instead facilitated a 203 percent increase in higher-return large-animal holdings, with no comparable effect on schooling. Both patterns persisted and appear to have strengthened over the following decade, well after insurance itself became unavailable to sample households. The results are consistent with poverty-trap dynamics in which households on opposite sides of an unstable herd-size threshold respond to a relaxed risk constraint in opposite, self-reinforcing ways.
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Productive Assets, Child Labor, and Schooling:
Evidence from Pastoralist Communities
Kanematsu Award; Nishijima Award; George F. Warren AwardSlides
Abstract
Productive assets help poor households generate income but may also increase demand for child labor. I study this trade-off among pastoralist households in Kenya and Ethiopia, where livestock are the dominant productive asset and children contribute to livestock production. Combining household panel data with satellite-based measures of rangeland conditions, I estimate how exposure to livestock productivity shocks at different stages of childhood affects child labor and educational attainment. Droughts significantly reduce livestock holdings. Among older children, current and previous-year droughts reduce the probability that direct livestock work is the primary activity, and previous-year droughts increase school attendance; school-age exposure is also associated with more education completed by endline. These findings are consistent with an asset-based opportunity-cost channel in which livestock losses reduce household demand for child labor. Positive productivity shocks do not produce a corresponding robust change in completed schooling or child time use. The results highlight the importance of accounting for potential complementarities between productive assets and child labor in the design of poverty-reduction policies.
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Site Selection Causes Bias in Policy-Oriented Social Science Research
Abstract
Social science research often relies on field data drawn from non-randomly selected study sites. To examine potential bias in site selection, we combine a systematic review of survey-based rural development studies in the Peruvian Amazon with a regionally representative community census and household survey. Studied communities have systematically higher development status, household welfare, and inequality than unstudied communities. The patterns are consistent with purposive site selection related to research costs and targeting, underscoring the importance of study-site selection bias in policy-relevant research.
Publications
- Restricting Mothers' International Migration and Human Capital Investment.
- Index-Based Livestock Insurance to Support Pastoralists against Droughts.
- Can Insurance Payouts Prevent a Poverty Trap? Evidence from Randomised Experiments in Northern Kenya.
- Understanding Pastoralists' Dynamic Insurance Uptake Decisions: Evidence from Four-Year Panel Data in Ethiopia.
Work in Progress
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Droughts, Cattle Raiding, and Child Marriage:
Evidence from Pastoralist Communities
Abstract
We study how drought and cattle raiding interact to affect child marriage in pastoralist communities in Kenya and Ethiopia, where marriage payments are prevalent, and how these risks narrow adolescent girls' educational and economic opportunities.
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Hazardous Child Labor Ban:
Substitution to Non-Hazardous Work and Education
Abstract
We study whether governments can reduce the harms of child labor by prohibiting hazardous jobs without banning child work altogether in Cambodia.
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Reducing Conflict Incentives through Insurance and Paid Apprenticeships
Abstract
We evaluate a field experiment providing paid apprenticeships to young men in pastoralist communities in Kenya and Ethiopia. The program provides work experience, business skills, and employer connections; outcomes include employment, earnings, and participation in conflict.