Date of This Version
5-13-2019
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.
Recommended Citation
Carrillo, Bladimir, "Present Bias and Underinvestment in Education? Long-run Effects of Childhood Exposure to Booms in Colombia" (May 13, 2019). Fondazione Eni Enrico Mattei Working Papers. Paper 1266.
https://services.bepress.com/feem/paper1266