The Effect of Household Wealth on Educational Attainment: Evidence from 35 Countries

Abstract

The authors use household survey data from the Demographic and Health Surveys (DHS) from 44 surveys (in 35 countries) to document different patterns in the enrollment and attainment of children from rich and poor households. They overcome the lack of income or expenditure data in the DHS by constructing a proxy for long‐run wealth of the household from the asset information in the surveys, using the statistical technique of principal components. There are three major findings. First, the enrollment profiles of the poor differ across countries but fall into distinctive regional patterns: in some regions the poor reach nearly universal enrollment in first grade, but then drop out in large numbers leading to low attainment (typical of South America), while in other regions the poor never enroll in school (typical of South Asia and Western/Central Africa). Second, there are enormous differences across countries in the “wealth gap,” the difference in enrollment and educational attainment of the rich and poor. While in some countries the difference in the median years of school completed of the rich and poor is only a year or two, in other countries the wealth gap in attainment is 9 or 10 years. Third, the attainment profiles can be used as diagnostic tools to suggest issues in the educational system, such as the extent to which low attainment is attributable to physical unavailability of schools.