This dissertation addresses the evaluation of impact of access to credit on two different outcomes in rural households: cultivated land (and environmental degradation through erosion) and human capital formation.
Three sets of difficulties are overcome. The fungibility of funds complicates inferences about uses of loan proceeds. Theoretical predictions about the impact of credit are not unambiguous, as credit is not a homogeneous good and it plays different roles in household strategies. Empirical tests must overcome self-selection and sample selection biases.
Several channels for the impact of credit are identified. Access to credit influences land use decisions through risk-coping, liquidity, and income and wealth effects. Access to credit influences schooling decisions for children from borrowing families through income, risk-management, gender, information, and child-labor demand effects. Actual observed outcomes are the net result of these effects (some of them positive and some negative).
Using a household theoretical model and a switching regressions empirical model, panel data from El Salvador are used to test for impacts of credit rationing. A positive effect of access to credit on natural resource conservation (through the release of pressures on fragile land) is identified in this country.
Three surveys of clients of microfinance programs in Bolivia are used to infer a net positive effect of program participation on education outcomes, measured by a schooling gap. Policy dilemmas emerge from the negative impact of microfinance on child-labor demand.
|School:||The Ohio State University|
|Department:||Agricultural, Environmental and Development Economics|
|School Location:||United States -- Ohio|
|Source:||DAI-A 79/09(E), Dissertation Abstracts International|
|Keywords:||Credit impact, Deforestation, Developing countries, Environmental degradation, Schooling|
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