Child ability and household human capital investment decisions in Burkina Faso

Abstract

Using data we collected in Burkina Faso, we explore how child ability influences parents' decisions to invest in their children's human capital. We use a direct measure of child ability for all primary school-aged children, regardless of current school enrollment. We explicitly incorporate direct measures of the ability of each child's siblings (both absolute and relative measures) to show how sibling rivalry exerts an impact on the parents' decision of whether and how much to invest in their child's education. We find that children with one standard deviation higher own ability are 16% more likely to be currently enrolled, while having a higher-ability sibling lowers current enrollment by 15% and having two higher-ability siblings lowers enrollment by 30%. Results are robust to addressing the potential reverse causality of schooling influencing child ability measures and using alternative cognitive tests to measure ability.