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The Effects of Education on Financial Outcomes: Evidence from Kenya

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  • Kehinde F. Ajayi
  • Phillip H. Ross

Abstract

We study the effects of education on the financial outcomes of young people using Kenya’s introduction of free primary education (FPE) in 2003 as an exogenous shock to schooling. Our identification strategy compares changes across cohorts and across regions with differing levels of pre-FPE enrollment. We find that FPE is associated with increases in educational attainment and increased use of formal financial services. We also find increases in financial capability, employment rates, and incomes. Our results are robust to controls for supply-side changes in financial access, providing new evidence that a large-scale government intervention can generate significant demand-driven improvements in financial outcomes.

Suggested Citation

  • Kehinde F. Ajayi & Phillip H. Ross, 2020. "The Effects of Education on Financial Outcomes: Evidence from Kenya," Economic Development and Cultural Change, University of Chicago Press, vol. 69(1), pages 253-289.
    • Handle: RePEc:ucp:ecdecc:doi:10.1086/702996
    DOI: 10.1086/702996
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    Cited by:

    1. Filmer, Deon, 2023. "Long-lived consequences of rapid scale-up? The case of free primary education in six Sub-Saharan African countries," International Journal of Educational Development, Elsevier, vol. 102(C).
    2. Maxwell Mkondiwa, 2023. "Is wealth found in the soil or in the brain? Investing in farm people in Malawi," Review of Development Economics, Wiley Blackwell, vol. 27(1), pages 134-157, February.
    3. Cornelissen, Thomas & Dang, Thang, 2022. "The multigenerational impacts of educational expansion: Evidence from Vietnam," Labour Economics, Elsevier, vol. 78(C).
    4. Richard Akresh & Daniel Halim & Marieke Kleemans, 2023. "Long-Term and Intergenerational Effects of Education: Evidence from School Construction in Indonesia," The Economic Journal, Royal Economic Society, vol. 133(650), pages 582-612.
    5. Kunt Šimunović, Pınar, 2024. "Education increases patience: Evidence from a change in a compulsory schooling law," Economics & Human Biology, Elsevier, vol. 53(C).

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