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Does Household Credit Benefit Child Schooling for the Poorest Ethnic Minorities? New Evidence from a Transitional Economy

This paper provides an original contribution concerning the influence of microcredit on child school dropout rates in the poorest regions in Vietnam. Two crucial empirical problems for the linkage between microfinance and children’s education are sample selection bias and the endogeneity of microcredit. Using a combination of the instrumental variable method and the Heckman approach to overcome these problems, the finding is that microcredit increases the opportunity for households to send their children to school through two main channels-increasing household per capita income and moving households out of poverty. Regarding traditional characteristics, we indicate that in a larger household size, there is a higher probability of children aged 6-14 dropping out of school, increasing the number of days per month away from school for children in such a household. In addition, the age and education of the household head have a negative association with the child school dropout rate. Furthermore, it is not surprising that households with larger agricultural lands are more likely to send their children to school and children in such households are less likely to work, suggesting that better endowment may support child education and reduce child labor.

Abstract

1. Introduction

2. Background to the Study

References

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