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The impact of microcredit on child education: quasi-experimental evidence from rural China

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  • Jing You
  • Samuel Annim

Abstract

This paper assesses causal effects of formal microcredit on children’s educational outcomes by using household panel data (2000 and 2004) in a poor province of northwest rural China. The unobservables between borrowers and non-borrowers are controlled in static and dynamic regression-discontinuity designs. The static analysis reveals significant positive impact of microcredit on children’s schooling years (captured by late entry, failed grades and suspended schooling from time to time) in 2000 only, and no indication of influence on academic performance for both rounds of survey. The dynamic analysis shows progressive treatment effects of microcredit on both longer schooling years and higher average scores. Formal microcredit appears to improve education in the longer term compared to the short term, and hence may have potential in relaxing the grip of educational poverty traps.

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  • Jing You & Samuel Annim, 2013. "The impact of microcredit on child education: quasi-experimental evidence from rural China," Global Development Institute Working Paper Series 18313, GDI, The University of Manchester.
    • Handle: RePEc:bwp:bwppap:18313
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    Cited by:

    1. Luo, Jay, 2019. "Poverty alleviation research in rural China: Three decades and counting," SocArXiv gmuav, Center for Open Science.
    2. Abid Hussain & Muhammad Jehangir Khan & Iftikhar Ahmad, 2016. "Impact of Credit on Education and Healthcare Spending in Rural Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 55(4), pages 853-870.
    3. Kalliyil, Muneer & Sahoo, Soham, 2024. "Does Restricting Access to Credit Affect Learning Outcomes? Evidence from a Regulatory Shock to Microfinance in India," IZA Discussion Papers 17404, Institute of Labor Economics (IZA).
    4. Phan, Chung Thanh & Sun, Sizhong & Zhou, Zhang-Yue & Beg, Rabiul & Ramsawak, Richard, 2023. "Does productive microcredit improve rural children's education? Evidence from rural Vietnam," Journal of Asian Economics, Elsevier, vol. 84(C).
    5. Donou-Adonsou, Ficawoyi & Sylwester, Kevin, 2017. "Growth effect of banks and microfinance: Evidence from developing countries," The Quarterly Review of Economics and Finance, Elsevier, vol. 64(C), pages 44-56.

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