# **6. OBSTACLES TO REACHING TERTIARY EDUCATION**

# **The Importance of Household Factors**

Enrollment decisions in education in general, and in tertiary education in particular, are made by individuals assessing expected benefits in terms of extra valued added versus the expect cost (tuition, transportation and related cost, and lost income of work). The decisions are affected by both short-term constraints (financial constraints) and long-term constraints (such as the household’s characteristics). The former affect the ability to finance the costs of education. The latter, in particular the education level of the household, which is difficult to change in the short run, affect the student’s progression through school as well as the quality of education received. More educated households are more likely to provide family support to continuing with education, as they are more familiar with the lifelong gains associated with education attainment, especially tertiary education. Additionally, children in more educated households may be more likely to develop non-cognitive skills and attitudes, which have a value per se, and at the same time interact positively with the cognitive skills acquired in the education system, therefore increasing the expected payoffs of education. Educated parents also seek out higher quality schools.

If the objective of the education system is to provide equal opportunities to all children to reach tertiary education, the effect of household characteristics in attaining tertiary education should be minimized. In order to provide a measure of equity in access to tertiary education in Central American countries, a variance decomposition analysis is performed, using a probit regression, to assess how much of the probability of starting postsecondary education is explained by household income, the education of the head of the household and location. If underlying family characteristics have little or no explanatory power in the decision to enroll, the R<sup>2</sup> would be close to zero.

As presented in Table 5, clearly, Central America is still far from reaching equal opportunity for all individuals, although the picture is mixed. Guatemala has the most unequal access to tertiary as household characteristics explain an important part of the probability of reaching tertiary education.

**Table 5: Explaining Access to Tertiary Education**<sup>**1 /2**</sup>

|**Country**|**Circa 2001**|**Circa 2009**|
|---|---|---|
|**Costa Rica**|0.18|0.19|
|**Panama**|0.17|0.18|
|**Guatemala**|0.35|0.43|
|**El Salvador**|0.30|0.23|
|**Honduras**|0.26|0.34|
|**Nicaragua**<br>Source: Authors’ c|0.28<br>alculations based on|0.18<br>several household|

<mark>Source: Authors’ calculations based on several household surveys circa 2001 and circa 2009</mark>

> 1 <mark>Pseudo R</mark> 2 <mark>from probit regressions. Dependent variable is starting post secondary education, independent variables are income and education of head of household and urban location.</mark>

> 2 <mark>Population group 21 to 25 years old.</mark>

Guatemala is followed by Honduras, and in both cases, the inequity in access has increased since 2000. On the other hand, El Salvador and Nicaragua have improved the equity in access to tertiary education. This evolution has allowed Nicaragua to join Costa Rica and Panama, which constitute the countries with the most equitable access to tertiary education in the region.

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