Credit Constraints in Higher Education Attendance: Longitudinal Evidence from Ethiopia
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Date
2024-08-22
Authors
Eigbiremolen, Godstime O.
Orji, Anthony
Journal Title
Journal ISSN
Volume Title
Publisher
African Economic Research Consortium
Abstract
This paper examines the household wealth–higher education attendance relationship and the evidence on credit constraints in post-secondary schooling. Using unique longitudinal data that link household wealth and measures of cognitive ability age 12 years to higher education attendance at age 19–22 years, we differentiated short-term credit constraints from long-term credit constraints and directly tested the relative importance of short and long-term credit constraints in schooling decision. We found that both short-term and long-term credit constraints determine the household wealth–higher education attendance relationship. Therefore, we recommend complementing short-term policies like financial aid with long-term interventions that empower households to continue to invest in human capital development over the child’s life cycle, which will crystalize in higher cognitive ability and readiness for
higher education.