The Effect of Household Wealth on Educational Attainment Around the World: Demographic and Health Survey Evidence

We use household survey data from the Demographic and Health Surveys (DHS) from 44 surveys (in 35 countries) to document different patterns in the enrollment and attainment of children from rich and poor households. We overcome the lack of income or expenditure data in the DHS by constructing a proxy for long-run wealth of the household from the asset information in the survey using the statistical technique of principal components. There are three major findings. First, the enrollment profiles of the poor differ across countries but fall into distinctive regional patterns: in some regions the poor reach nearly universal enrollment in first grade, but then drop out in droves leading to low attainment (typical of South America),while in other regions the poor never enroll in school (typical of South Asia and Western/Central Africa). Second, there are enormous differences across countries in the “ wealth gap,” the difference in enrollment and educational attainment of the rich and poor. While in some countries the difference in the median years of school completed of the rich and poor is only a year or two, in other countries the wealth gap in attainment is 9 or 10 years. Third, the attainment profiles can be used as diagnostic tools to examine issues in the educational system, such as the extent to which low enrollment is due to physical unavailability of schools. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the World Bank, its Executive Directors, or the countries they represent.