taken in consideration in order to implement further educational policies oriented to increasing school attendance.

# **7. Conclusions**

This paper contributes to the existing education literature by analyzing the determinants of school enrollment, attendance and working in Bolivia from 1999 to 2007.

Using a trivariate Probit model, evidence is found of a significant increase in enrollment among indigenous children and children living in urban areas. In general the proportion of not enrolled children in primary school is steadily decreasing, achieving 4.4 percent in 2007. However, about 40 percent of the enrolled children are not attending school. When analyzing the determinants of the attendance behavior, poverty and indigenous turn out to be the most important characteristics. Nonetheless, the same variables show different patterns in the working estimation. In fact, if indigenous children are progressively quitting their jobs, extremely poor children cannot.

The enrollment figures look promising when evaluating the achievement of the second MDG on universal primary education, but suggest that further efforts are required to allow children to attend school and abandon work activities.

Education policies aiming at spreading primary education to indigenous and extremely poor children seem to have produced positive effects. More specifically, inclusive policies toward the indigenous, school feeding, and conditional cash transfer programs allowed indigenous and poor children to attend school. On the other hand, the BJP initiative seems to encourage free riding behavior, leading people to enroll but not to attend. The reason for this might be that the second installment of the BJP is not large enough for many extremely poor children to forgo working.

Thus, it is evident that the attendance decision, corresponding to the learning phase, is led by a plain welfare improvement of the extremely poor families rather than an investment for the future. In fact, it can be inferred that there is no substitution between working and schooling among extremely poor children. In other words, as already found by Ravallion and Wodon [21] in the case of Bangladesh, it seems that child labor does not displace schooling among extremely poor individuals in Bolivia. On the contrary, indigenous children became able to substitute between such goods.

There are three main caveats of the analysis. First, as mentioned, the absence of domestic work data could bias the obtained results with relation to the gender issue. Second, the analysis is carried out at the national level, disregarding any different dynamic that is occurring at the local level. Finally, the absence of a good instrument to control for the selection problem could be a potential source of bias.

The results have four main policy implications. Policies aiming to foster enrollment in rural areas should be promoted. At the same time, incentives and measures to stimulate school participation need to be revised in order to encourage child labor abandonment by the poorest. Moreover, a different setting of the installments of the BJP should be devised to avoid free riding and consequently promote human capital growth. Finally, educational policies should 17