To the best of my knowledge, this is first study to disentangle nature and nurture effects in the intergenerational transmission of human capital in the context of a developing country. Family structures and the average schooling attainment of parents and children differ widely between developed and developing countries and therefore the transmission of human capital from one generation to the next might also work differently. Developing countries, in particular because of the large number of orphans produced by the HIV/AIDS epidemic and conflicts, are also in need of policy recommendations for organizing orphan care. The results from this paper suggest that maintaining an orphan in his extended family is beneficial and favors the transmission of human capital.

Section 2 of this paper describes the data and the Rwandan context. Section 3 presents the results of the empirical analysis together with several robustness tests. This section also discusses the external validity of the estimates. Section 4 concludes.

# **2. Recomposition in Rwandan Families after the Genocide and Data Description**

This study uses data from the Enquête Intégrale sur les Conditions de Vie des Ménages (EICV) 1999-2001. This is a fairly standard survey that measures household living conditions. In urban areas the survey took place between October 1999 and December 2000, while rural areas were surveyed between July 2000 and July 2001 (Siaens, Subbarao and Wodon, 2003). Using this survey data Siaens, Subbarao and Wodon (2003) assess the vulnerability of orphans and conclude that they are more at risk in terms of school enrollment,<sup>3</sup> child labor, and malnutrition.

Figure 1 suggests how large the orphan population is in Rwanda. It plots, by age, the proportion of children living in households from which _both_ biological parents are absent. For children over age 6, this proportion is consistently over 15 percent and reaches 22 percent for children aged 15. Not all of these children are orphans; the survey only indicates that their biological parents are not present in the household in which they live. However, Siaens, Subbarao and Wodon (2003) suggest that many of them _are_ orphans. It appears, however, that many them are not necessarily orphans, or at least double orphans. Figure 1 also plots, from the 2000 Demographic and Health Survey for Rwanda, another nationally representative survey of Rwanda, the proportion of double orphans.<sup>4</sup> Starting with age 7<sup>5</sup> , the proportion of double orphans is about one-half the proportion of children who are not living with both their

> 3 Table 6, panel A, using regressions with household fixed effects for households where both biological and non-biological children live, confirms the finding that, controlling for age and gender, the latter are less likely to be enrolled in school than the former.

> 4 Contrary to the EICV, the Demographic and Health Survey 2000 explicitly asked whether the biological parents were still alive.

> 5 The analysis will focus on children 7 to 15 years of age. Notice in figure 1, the sharp increase, just before age 7, of the proportion of double orphans and the percentage of children living without both biological parents: this marks the effect of the Genocide which took place between April and July 1994. Given the difference in survey dates (June-November 2000 for the DHS and October 1999-July 2001 for the EICV) and the long span of the EICV, the discontinuity due to the Genocide might be less sharp than if I could have used exact date of births, which are not available in the EICV.

5