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Mobile money, risk sharing, and educational investment: Panel evidence from rural Uganda

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  • Rayner Tabetando
  • Tomoya Matsumoto

Abstract

We examine the impact of the rapidly expanding mobile banking service “mobile money” on rural households' ability to smooth investment in schooling after a negative shock. We find that a negative shock induces a 9.3‐percentage point decrease in per school‐age child educational expenditure for households who do not use mobile money compared to an 8.3‐percentage point decrease for households that have adopted mobile money. The underlying mechanism is an increase in remittance receipt and the diversity of senders owing to the reduction in transactions cost provided by mobile money. We show that our results are robust to alternative mechanisms. We use the expansion in mobile money agent network as an exogenous variation in access to mobile money.

Suggested Citation

  • Rayner Tabetando & Tomoya Matsumoto, 2020. "Mobile money, risk sharing, and educational investment: Panel evidence from rural Uganda," Review of Development Economics, Wiley Blackwell, vol. 24(1), pages 84-105, February.
    • Handle: RePEc:bla:rdevec:v:24:y:2020:i:1:p:84-105
    DOI: 10.1111/rode.12644
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    Cited by:

    1. Parlasca, Martin & Johnen, Constantin & Qaim, Matin, 2021. "Use of Mobile Financial Services Among Farmers in Africa: Insights from Kenya," 2021 Conference, August 17-31, 2021, Virtual 315863, International Association of Agricultural Economists.
    2. Ablam Estel Apeti, 2022. "Household welfare in the digital age: Assessing the effect of mobile money on household consumption volatility in developing countries," Post-Print hal-03819779, HAL.
    3. Valentina Rotondi & Francesco C. Billari, 2022. "Mobile Money and School Participation: Evidence from Africa," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 41(1), pages 343-362, February.
    4. Johnen, Constantin & Parlasca, Martin & Mußhoff, Oliver, 2023. "Mobile money adoption in Kenya: The role of mobile money agents," Technological Forecasting and Social Change, Elsevier, vol. 191(C).
    5. Miyajima, Ken, 2022. "Mobile phone ownership and welfare: Evidence from South Africa’s household survey," World Development, Elsevier, vol. 154(C).
    6. Apeti, Ablam Estel, 2023. "Household welfare in the digital age: Assessing the effect of mobile money on household consumption volatility in developing countries," World Development, Elsevier, vol. 161(C).
    7. Gregory Mvogo & Christèle Gladisse Awounang Djouaka, 2022. "Effet du mobile money sur la résilience des ménages exerçant des activités génératrices de revenus au Cameroun," African Development Review, African Development Bank, vol. 34(4), pages 459-471, December.
    8. Qiu, Christina M., 2022. "Regionalized liquidity: A cross-country analysis of mobile money deployment and inflation in developing economies," World Development, Elsevier, vol. 152(C).
    9. Jianmei Zhao & Lele Zhao, 2022. "Mobile payment adoption and the decline in China’s household savings rate," Empirical Economics, Springer, vol. 63(5), pages 2513-2537, November.
    10. Ajefu, Joseph B. & Massacky, Falecia, 2023. "Mobile money, child labour and school enrolment," Telecommunications Policy, Elsevier, vol. 47(10).
    11. Min Liu & Pengfei Shi & Jinxia Wang & Huimin Wang & Jikun Huang, 2023. "Do farmers get a greater return from selling their agricultural products through e‐commerce?," Review of Development Economics, Wiley Blackwell, vol. 27(3), pages 1481-1508, August.
    12. Richard Chamboko, 2024. "Digital financial services adoption: a retrospective time-to-event analysis approach," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 10(1), pages 1-27, December.
    13. Hiroyuki Egami & Tomoya Matsumoto, 2020. "Mobile Money Use and Healthcare Utilization: Evidence from Rural Uganda," Sustainability, MDPI, vol. 12(9), pages 1-34, May.

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