In this paper, I study how displacement of parents during a violent conflict affects investment in their children’s’ education years later. Using ethnic division during the Bosnian War as a natural experiment, I can identify exogenously displaced households and compare them to households who did not have to move because of the war. I find that displaced households spend significantly less on the education of their children in primary and secondary school (20 to 35 %), while their children are equally likely to be enrolled. The result also holds for expenditure positions like textbooks, school materials and annual tuition in secondary school. A decomposition of the causal effect shows that differences in income and the stock of durable goods can at most explain one third of the finding. Some evidence points towards increased uncertainty about the future of displaced parents. The finding implies that the disadvantage of displacement might be carried on to the next generation through the quality of education.
Year: 2013 HiCN Working Paper No. 152