Origins of noncognitive traits and their influence on human capital
Ross, Phillip Hugh
MetadataShow full item record
This dissertation consists of three chapters exploring the causes and consequences of human capital in an international setting. The first two chapters focus on the origins of noncognitive characteristics and their role in human capital formation. The third chapter demonstrates the consequences of human capital for financial inclusion. The first chapter shows that locus of control has origins in ancestral control over subsistence and demonstrates the implications this relationship has for human capital investment. Agricultural societies differed in their control over crop yields based on the fluctuations of a crucial external input: rainfall. I exploit differences across individuals of different ethnicities residing in the same subnational regions. Descendants of agricultural societies with greater rainfall risk have a more external locus of control. Consistent with limited learning, evidence from second-generation migrants suggests that the intergenerational transmission of ancestor's circumstances partly informs beliefs. Ancestral control contributes to differences in schooling effort among an international sample of 15-year-olds. The second chapter provides empirical evidence of a non-linear relationship between an adolescent's aspirations gap and their human capital. Higher aspirations at age 12 are correlated with higher human capital levels at age 19, up to a point. This empirical result provides evidence for the theoretical prediction that aspirations that are ahead, but not too far ahead, provide the best incentives for investment. I provide suggestive evidence that age 12 aspirations influence age 19 human capital levels through the child's time investment in education, long-term orientation, and agency, but not the level of household education expenditure. The third chapter (with Kehinde Ajayi) studies the effects of education on the financial outcomes of youth. We use Kenya's introduction of Free Primary Education (FPE) in 2003 as an exogenous shock to schooling. Our identification strategy compares changes across cohorts and across regions with differing levels of pre-FPE enrollment. We find that FPE is associated with increases in educational attainment and increased use of formal financial services. We also find increases in financial capability, employment rates, and incomes. Our results provide new evidence that a large-scale government intervention can generate significant demand-driven improvements in financial outcomes.