Poor Economics: Rethinking Poverty & the Ways to End it

by Abhijit V. Banerjee

Another classic top-down program is compulsory schooling. In 1968, Taiwan instituted a law that made it mandatory for all children to complete nine years of schooling (the previous law only required six years of school attendance). This law had a significant positive effect on the schooling of both boys and girls, as well as on their employment prospects, especially for girls.16 The benefits of education are not only monetary: The Taiwan program had a large effect on child mortality.17 In Malawi, girls who did not drop out because of the cash transfer were also less likely to become pregnant. The same results were found in Kenya.18 There is now a significant body of rigorous evidence testifying to the far-reaching effects of education. Moreover, this research also concludes that every little bit of education helps. People who are comfortable with reading are more likely to read newspapers and bulletin boards and to find out when there is a government program available for them. People who go on to secondary education are more likely to get a formal-sector job, but even those who don’t are able to run their businesses better.