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  3. Do communities tax education? Evidence from Senegal


Tesis magíster

Do communities tax education? Evidence from Senegal

  • class Tesis, Magíster en Economía, IE-PUC, 2016

Abstract: Traditional solidarity systems built for cultural purposes but also due to the lack of insurance markets and social safety nets play an important role in development. This paper explores the effect of children’s education on the demand for money transfers. In a context where households have to oblige to social rights and obligations, dictated by their community, investment in their children’s education might not be optimal. In particular I wish to investigate whether education is a signal of wealth leading to an increase in the demand for money transfers, thereby adding a cost to education. Using the idea that the practice of bride price is an incentive to educate girls more than boys I try to isolate the causal influence of education on transfers by using the sex-specific treatment of children. I elaborate a difference and difference strategy between ethnic groups that practice relatively more bride price than others. This first set of evidence suggests that communities may tend to tax primary education, thereby creating an entry cost to education.