## Educational Choices and Educational Constraints: Evidence from Bolivia (WP/00/42)

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### Overview and Scope
- Author: Gabriela Inchauste
- Authorized for distribution by Sanjeev Gupta
- Publication: IMF Working Paper, Fiscal Affairs Department
- Working Paper number: WP/00/42
- Date: March 2000
- JEL Classification Numbers: I20, H52
- Keywords: Education, cash transfers, education spending, hazard model, Bolivia
- Author’s E-Mail Address: minchauste@imf.org

### Research Question and Data
- Investigates determinants of individuals quitting school in Bolivia and distinguishes quitting due to financial constraints versus other reasons.
- Uses Bolivian household data (household dataset details are described in the paper).
- Employs discrete-choice and duration models, including a hazard model, to estimate probabilities of leaving school.

### Key Findings (as stated in the abstract)
- Government cash transfers can help to improve educational attainment somewhat.
- Monetary interventions alone are unlikely to produce large improvements in educational attainment if nonmonetary limitations remain unaddressed.
- Nonmonetary constraints are particularly binding for indigenous women, who have the lowest levels of education in the country.

### Methodology and Analytical Approach (from Table of Contents and abstract)
- Theoretical framework developed in "Theoretical Model" section.
- Econometric strategy includes logit and hazard specifications (see "Econometric Model" and "Results" sections).
- Simulations are used to assess the impact of government cash transfers on educational attainment (see "Simulation Results" subsection).

### Structure of the Paper (major thematic sections)
- I. Introduction
- II. Theoretical Model
- III. Characteristics: Bolivia
- IV. Econometric Model
- V. Data and Summary Statistics
  - Includes subsection: A. Constrained and Unconstrained Individuals
- VI. Results
  - A. Logit
  - B. Hazard
  - C. Simulation Results
- VII. Summary and Conclusions
- Appendix I: Sensitivity Analysis: Probability of Being Constrained

### Policy Implications (as highlighted by the paper)
- Cash-transfer programs can be a component of policies to raise educational attainment but are insufficient on their own.
- To achieve significant improvements, policymakers must address nonmonetary barriers to schooling (for example, cultural, geographic, institutional, or time-allocation constraints), with targeted attention to indigenous women.

### Analytical Outputs Referenced
- Tables: social indicators and government social expenditure; sample statistics; constrained vs. unconstrained individuals; maximum likelihood results; fitted probability values.
- Figures: conceptual investment in human capital diagrams; histograms of educational achievement by indigenous status and gender; hazard rates by demographic groups; simulation result charts for indigenous women and married men/women.
- Appendix: sensitivity analysis of the probability of being constrained.

*Source: IMF Working Paper WP/00/42, "Educational Choices and Educational Constraints: Evidence from Bolivia" (Gabriela Inchauste), March 2000.*

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