DP15862 Credit Constraints and Demand for Remedial Education: Evidence from Tanzania

Author(s): Konrad B. Burchardi, Jonathan de Quidt, Selim Gulesci, Munshi Sulaiman
Publication Date: March 2021
JEL(s): O12, O15
Programme Areas: Financial Economics, Development Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=15862

We study how credit constraints affect access to a remedial education program for girls. We gave an unconditional cash transfer to randomly selected households, then measured their Willingness To Pay (WTP) for the program. In the control group average WTP was 3,300 Tanzanian Shillings, seven percent of per-capita monthly expenditures. For those identified at baseline as able to borrow, the cash transfer increases WTP by three percent. For those unable to borrow, the cash transfer increases WTP by 27 percent. We conclude that credit constraints limit access to educational programs, and may increase inequality of outcomes.