Are Some Out-of-School Kids Making a Rational Economic Choice?

Numbers of Out-of-School children are not falling (UNESCO, 2014); and that is even if we believe UIS numbers (see Carr-Hill, 2013). This could be because of the reduced donor attention to basic education or because teachers... [ view full abstract ]

Numbers of Out-of-School children are not falling (UNESCO, 2014); and that is even if we believe UIS numbers (see Carr-Hill, 2013). This could be because of the reduced donor attention to basic education or because teachers continue to discriminate in ways suggested by the CREATE team (Hunt, 2008), but a plausible simpler explanation could be that:
• Those children who have been to but dropped out of school – and their parents - don’t like what they get in poor quality schools, and can’t afford even low cost private shools;
• Although not cognisant of the rate of return literature, showing shifts in benefits by level of schooling, they know what happens to their friends and elder brothers and reckon that the chances of getting anywhere with basic schooling are limited (and their chances of succeeding in higher education are very limited);
• At the same time, small scale markets are growing in poor countries and isn’t it more sensible for them to get in on the ground floor of the labour market?

Evidence is provided about quality of schools, rates of return at different levels of schooling, and working patterns of our-of-school children compared to those in-school from household surveys and from the UNICEF OOSCI surveys (UNICEF, 2015).

Of course, this approach to explanation is almost diametrically opposed to the CREATE and UNICEF explanations in terms of children being ‘pushed out’ of school, and the paper presents both sides of the argument in order to develop a debate.