Edmonds (2006), which shows that increases in household income in South Africa increased school attendance of 10 to 17 year-olds.

One strand of the literature has looked at the relationship between schooling and economic crises, showing that economic downturns lead to declines in school enrollment, especially among poorer children. Fallon and Lucas (2002) summarize the evidence of the impact of economic crises on households, with particular attention to the 1990s financial crises in Southeast Asia and Mexico. They find that school enrollment drops during periods of economic crisis. This impact of crises or growth shocks on education has been found extensively throughout developing countries: for example, in Costa Rica by Funkhouser (1999); in Indonesia by Thomas et al. (2004); in Mexico by McKenzie (2003); and in Argentina by Rucci (2004). Yet, when summarizing the literature of the impact of economic crises and natural disasters on various dimensions of well-being including schooling decision, Skoufias (2003) concludes, “It would not be surprising if both the direction and the magnitude of the effect of aggregate shocks on child schooling and work turn out to vary from country to country depending on the level of urbanization and the financial and economic development.” Negative household employment shocks are associated with increased dropout rates. Duryea, Lam, and Levinson (2007) show how, in Brazil, male household head unemployment increases child labor and decreases school advancement, particularly for girls. In Mexico, Parker and Skoufias (2006) find that idiosyncratic shocks such as parents’ unemployment and divorce have no impact on boys’ schooling but reduce school attendance and school attainment among girls.<sup>6</sup> Moreover, evidence suggests that the relationship between income shocks and schooling is mediated by access to credit markets. In one of the seminal papers of the literature, Jacoby and Skoufias (1997) use Indian panel data of rural households and find that, in a context of financial market failures, idiosyncratic household income shocks had a larger effect on school attendance than anticipated village-level shocks. Flug, Spilimbergo, and Wachtenheim (1997) examine secondary school enrollment rates using cross-country panel data for the period 1970-92, and find that differences in financial depth (as a proxy of credit availability) account for a third of the difference in secondary school enrollment rates between Latin America and developed countries. Jensen (2000) and Beegle, Dehejia, and Gatti (2005) show that agricultural shocks reduce school

> 6 On the other hand, studies have found that positive labor conditions can also contribute to higher dropout rates by incentivizing youth employment at the expense of continuing education. For example, in Brazil over a 20-year period (1977–98), Duryea and Arends-Kuenning (2003) find that the employment rate of 14 to 16 year-old living in cities increases as local labor market opportunities improve, as they become more likely to leave school. Atkin (2016) looks at the impacts of globalization on the Mexican labor force and finds that, during the period 1986 to 2000, the massive expansion of export manufacturing altered the distribution of education. The new job opportunities created by the maquila plants increased the opportunity cost of schooling for youths on the dropout margin at age 16.

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