Towards an understanding of parental expectations of returns to education in developing countries
Contributors: PI: Alex Armand
Financing: Fundación Ramón Areces

Education is a very important aspect of a country’s growth, and it is essential to understand how parents and/or children make decisions when making this type of investment in human capital.

The project aims to understand parents’ expectations that may affect their decisions on their child’s education and how these expectations may change over time. An essential aspect of the project is to analyze the information that these parents receive, since many social policies in the world ignore the informational component when targeting low-income households.

Understanding how expectations work is important in developing countries mainly because, the situation of labor markets can be very uncertain, in terms of high rates of unemployment, for example. Labor market conditions that affect adults can have obvious and direct effects, such as the reduction of income, but they also bring about indirect effects, for example changing parents’ expectations about the value of education.

This research proposes to use a unique database containing subjective expectations on yields in secondary education. This data was collected in Macedonia as part of an evaluation of conditional cash transfers during 2010 and 2013.