Working Papers,
Lund University, Department of Economics

Abstract: Previous research has shown that school enrollment in developing countries responds to the changes in demand for low-skilled and high-skilled labor in the market. Using data from Mexico, I show that the negative effects of increases in relative demand for low-skilled labor are not limited to lower rates of school enrollment. Parents respond to the increases in labor market opportunities for low-skilled labor in the manufacturing sector by spending less time helping children with their studies and spending less on children's education while they are enrolled at school. This suggests that households respond along the intensive margin as well as on the extensive margin.

Keywords: Low-skilled labor; Parental investment; Children’s education; Human capital

JEL-codes: I21; I25; J23; J24; O54

31 pages, February 17, 2014

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