Economic Growth and the Demand for Education: Is There a Wealth Effect?
Author(s)
Glewwe, Paul; Jacoby, Hanan G.
Abstract
Human capital investment in developing countries is thought to be significantly constrained by household resources. This paper studies the relationship between household resources and the demand for education using recent household survey data from Vietnam. The data cover a period, 1993-1998, of exceptional income growth in Vietnam, during which secondary school enrollment rose substantially. Using consumption expenditures to measure household wealth, we find a positive and significant relationship between changes in wealth and changes in the demand for education. This wealth effect persists even after controlling for locality-specific factors such as changes in education returns and the supply and quality of schools, and for the opportunity costs of schooling.
