Parental Preferences and Resource Allocation for Child Education in Ethiopia

ABSTRACT This article investigates the preference of parents for interchild allocation of education investment in Ethiopia. The literature has established that child educational achievement is correlated with parental education and household resources. However, the literature failed to provide answers for how to raise educational achievement where there are no educated parents, or why cash grants failed to increase education quality in developing countries. Drawing on a unique survey and experimental dataset disaggregated by individual children and parents from Ethiopia, this study will shed light on the role played by dynamics of intrahousehold decision-making and nonprice drivers of investment in child education. The findings of the study show that parents reinforce the educational achievements of their children. But educational investment does not vary by the gender of children. Instead, parental perceptions about the capability of children and aspirations for child education are important drivers of intrahousehold allocation of educational investment. The study also finds that the preferences of mothers and fathers for child education are not identical but largely similar. The results highlight the importance of signaling the academic potential of children and raising parental aspirations for human capital development in developing countries.