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The effects of microfinance on child schooling: a retrospective approach

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  • Leonardo Becchetti
  • Pierluigi Conzo

Abstract

Two crucial problems when research agencies or donors need to assess empirically the microfinance/children education nexus on already operating organizations are lack of availability of panel data and selection bias. We propose an original approach which tackles these problems by combining retrospective panel data, fixed effects and comparison between pre- and post-treatment trends. The relative advantage of our approach vis-�-vis standard cross-sectional estimates (and even panels with just two time periods) is that it allows to analyse the progressive effects of microfinance on borrowers. With this respect, our article gives an answer to the widespread demand of impact methodologies required by regulators or by funding agencies which need to evaluate the current and past performance of existing institutions. We apply our approach to a sample of microfinance borrowers coming from two districts of Buenos Aires with different average income levels. By controlling for survivorship bias and heterogeneity in time invariant and time varying characteristics of respondents we find that years of credit history have a positive and significant effect on child schooling conditional to the borrower's standard of living and distance from school.

Suggested Citation

  • Leonardo Becchetti & Pierluigi Conzo, 2014. "The effects of microfinance on child schooling: a retrospective approach," Applied Financial Economics, Taylor & Francis Journals, vol. 24(2), pages 89-106, January.
    • Handle: RePEc:taf:apfiec:v:24:y:2014:i:2:p:89-106
    DOI: 10.1080/09603107.2013.856998
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    Cited by:

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    2. Bernal, Carolina & Vlaicu, Razvan, 2023. "Child Labor, Rainfall Shocks, and Financial Inclusion: Evidence from Rural Households," IDB Publications (Working Papers) 13008, Inter-American Development Bank.
    3. Thai, Pham Huu Hong, 2018. "Does household credit benefit child schooling for the poorest ethnic minorities? New evidence from a transitional economy," Children and Youth Services Review, Elsevier, vol. 89(C), pages 103-112.
    4. Nargiza Alimukhamedova & Randall Filer & Jan Hanousek, 2017. "Themed Issue: Cash Transfers and Microfinance," Development Policy Review, Overseas Development Institute, vol. 35(5), pages 645-657, September.

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