Does Education Enhance Productivity In Smallholder Agriculture? Causal Evidence From Malawi.

Author: Thomas Ferreira

Year: Unknown

Category: Dissertations

Abstract

Malawi is a low-income country where the majority of the population live and work in subsistence agriculture. In this setting, it is important to understand the effect of education – which is generally considered as a pathway out of poverty – on people’s livelihoods. The effect of education on subsistence agricultural production has been estimated in many different settings but no studies have dealt with the endogenous nature of education in the production process. This paper contributes to the literature by estimating the causal effect of education on subsistence agricultural productivity in Malawi. To estimate the causal effect of education in agricultural production, a two-stage least squares approach is used, using the introduction of free primary education and the age of paternal orphanhood as two instrumental variables (IV) for education. The causal effect of education on the earnings of the employed is also estimated to gain a deeper understanding of the role that education plays in rural Malawi. This paper finds that there are positive returns to education in agricultural productivity, specifically in maize production and, the total value of all produce. Returns to education are higher in the earnings sector though. An interpretation of the results as a local average treatment effect suggests free primary education attracted students with lower returns to education while paternal orphanhood caused students with higher returns to exit school.

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