# **1. Introduction**

Bolivia remains among the three poorest countries in the western hemisphere and the poorest in South America [26], with a per capita GDP of 1,378 US dollars and with 37.7 percent of the population living below the extreme poverty line in 2007<sup>1</sup> . According to the United Nations, achieving primary education represents a key factor for enhancing development progresses in the poorest countries<sup>2</sup> . Efforts have been made to guarantee the continuous provision of universal, free-of-charge primary education. However, the fact that Bolivia has an illiteracy rate of 13 percent for people aged 15 or older confirms that the difficulties experienced by its educational system are among the most severe in Latin America [29].

In order to reaffirm the commitment of the state to improve the educational system, a series of cash-transfer benefits and school feeding programs have been approved over the last 20 years. These programs are believed to be effectively contributing to higher enrollment and attendance rates, nevertheless several challenges concerning lack of homogenous implementation across municipalities and schools still need to be overcome. Likewise, with the goal of creating enabling conditions to guarantee the effective, multiethnic and non-discriminatory access to educational services, special programs such as the Intercultural Bilingual Educational Program have been developed to attend the needs of the vast indigenous population of the country<sup>3</sup> .

Moreover, Bolivia represents a country with a high share of child labor. This share achieves about 30 percent among extremely poor families. Child labor not only represents an exploitative activity, but it is also associated with a low level of education (see Basu and Van [6] for example), therefore jeopardizing human capital growth. Yet, as emphasized by Baland and Robinson [4], the real issue is to better understand the determinants of child labor so as to evaluate its welfare implications. More generally, it is crucial to jointly investigate the factors driving schooling and child labor decisions.

This paper aims at analyzing the determinants of primary school enrollment, attendance and child labor in Bolivia from 1999 to 2007, identifying how the substitution and complementary relationships among such activities evolve over time.

The unprecedented use of Bolivia’s national household survey MECOVI for several years allows for an in-depth historical analysis of the recent trends of schooling and child labor. Due to the lack of empirical literature on this specific issue for Bolivia, this study represents a contribution that aims at filling the gap.

Results at the descriptive level reveal that enrollment became progressively more widespread in Bolivia. Nonetheless, the attendance figures are discouraging, as about 40 percent of the enrolled children did not go to school.

Triprobit estimations show that the increase in enrollment is led by indigenous and children living in urban areas, whereas poverty and indigenous are

> 1 GDP data are from the United Nations National Accounts Main Aggregate Database, data on poverty are from MECOVI 2007.

> 2 More specifically, this represents the second Millennium Development Goal (MDG) as established by the United Nations.

> 3 According to the MECOVI surveys employed, more than 50 percent of the total Bolivian population declare themselves belonging to indigenous groups.

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