Women's Employment and Its Relation to Children's Health and Schooling in Developing Countries: Conceptual Links, Empirical Evidence, and Policies

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Instrumental variables techniques are required to solve the possible endogeneity of household consumption. The most difficult task is to find a valid instrument for the regression above. The literature on demand systems typically uses income to instrument consumption. If preferences are separable between consumption and leisure, total consumption but not income is relevant to decide on the good shares. However, there are several reasons why household income might not be a valid instrument. Households with a child in bad health might increase labor supply to save money for future health care expenses. Consequently, income would be negatively related to ...
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Women’s Employment and Its Relation to Children’s Health and Schooling in Developing Countries: Conceptual Links, Empirical Evidence, and Policies