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Present Bias and Underinvestment in Education? Long-run Effects of Childhood Exposure to Booms in Colombia

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  • Carrillo, Bladimir

Abstract

This paper examines the long-run impacts of income shocks by exploiting variation in coffee cultivation patterns within Colombia and world coffee prices during cohorts' school-going years in a differences-in-differences framework. The results indicate that cohorts who faced higher returns to coffee-related work during school-going years completed fewer years of schooling and have lower income in adulthood. These findings suggest that leaving school during temporary booms results in a significant loss of long-term income. This is consistent with the possibility that students may ignore or heavily discount the future consequences of dropout decisions when faced with immediate income gains.

Suggested Citation

  • Carrillo, Bladimir, 2019. "Present Bias and Underinvestment in Education? Long-run Effects of Childhood Exposure to Booms in Colombia," ETA: Economic Theory and Applications 288455, Fondazione Eni Enrico Mattei (FEEM).
    • Handle: RePEc:ags:feemth:288455
    DOI: 10.22004/ag.econ.288455
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    Cited by:

    1. Patrick Bennett, 2021. "The Work-To-School Transition: Job Displacement and Skill Upgrading among Young High School Dropouts," CESifo Working Paper Series 9417, CESifo.
    2. John A. List & Ragan Petrie & Anya Samek, 2023. "How Experiments with Children Inform Economics," Journal of Economic Literature, American Economic Association, vol. 61(2), pages 504-564, June.
    3. Bourassa-Viau, Simon & Garon, Jean-Denis & Haeck, Catherine, 2022. "Educational choices and labour market outcomes in times of crisis," Economics of Education Review, Elsevier, vol. 88(C).
    4. Carvajal, Hernán, 2023. "Efectos de la suspensión de las aspersiones aéreas con glifosato sobre la deserción escolar en Colombia," Documentos CEDE 20307, Universidad de los Andes, Facultad de Economía, CEDE.
    5. repec:ags:aaea22:335460 is not listed on IDEAS
    6. Johan Hombert & Adrien Matray, 2019. "Technology Boom, Labor Reallocation, and Human Capital Depreciation," Working Papers 260, Princeton University, Department of Economics, Center for Economic Policy Studies..
    7. Kebede,Hundanol Atnafu, 2021. "The Pass-Through of International Commodity Price Shocks to Producers’ Welfare : Evidence from EthiopianCoffee Farmers," Policy Research Working Paper Series 9839, The World Bank.
    8. Habtamu Ali Beshir & Jean-François Maystadt, 2022. "Price shocks and human capital: Timing matters," LIDAM Discussion Papers IRES 2022020, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    9. Thiago Scarelli & David N Margolis, 2022. "When You Can't Afford to Wait for a Job: The Role of Time Discounting for Own-Account Workers in Developing Countries," PSE Working Papers halshs-03288728, HAL.
    10. Xu, Huayu, 2021. "The long-term health and economic consequences of improved property rights," Journal of Public Economics, Elsevier, vol. 201(C).
    11. Boone, Christopher & Kaila, Heidi & Sahn, David E., 2024. "Posh Spice or Scary Spice? Resource Booms, Wealth, and Human Capital across Ages," IZA Discussion Papers 17085, Institute of Labor Economics (IZA).

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    Keywords

    Research Methods/ Statistical Methods;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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