How to encourage girls to school? Aid or industry?

States and aid agencies prefer supply side programs–more schools, better teachers, textbooks or lunches.

But will parents send their kids to school if it aren’t jobs to enter?

We examine the effects of a roughly simultaneous supply-side influence (the Female Stipend Program) and a major demand-side influence (the expansion of the garment industry) on girls schooling in Bangladesh in the 1980’s and 1990’s.

…We find that the arrival of garment jobs increases schooling for younger girls: a ten percent increase in garment jobs corresponds to an 1.35 percentage point percent increase in the probability that a 5-year-old girl is in school.

There is a zero average effect for older girls, some of whom likely drop out of school to take the jobs right away.

We identify effects of the FSP with a regression discontinuity and do not find a statistically significant effect of the program.

A new paper from Rachel Heath and Mushfik Mobarak.

Many other excellent papers from the NEUDC conference (the Cannes of development economics) here.