Policies for increasing school completion rates for the poor

Abstract

Human capital accumulated through education is a key factor in increasing individual income. Therefore, policies that aid in increasing school enrollment and completion rates among the poor are essential for poverty alleviation. Despite the fact that primary school enrollment rates in developing countries have increased, there remains a significant gap in school completion rates. This study focuses on the decisions individuals make regarding completing their education to obtain future job-related skills. We clarify factors that increase school enrollment and completion rates and indicate the effectiveness and priority of policies to increase the rates through a simple model. Our findings suggest that school policies have limited impact on increasing school enrollment and completion rates, particularly among the poor, who tend to have a high discount rate for the future and focus on the current situation. Therefore, policies that aim to reduce their discount rate should be prioritized. Moreover, we found that extending learning hours at school has a negative impact on the school completion rates of students from poor families. Therefore, policies aimed at improving individual learning environments are effective in increasing rates, especially for the poor. These findings have important implications for policymakers and education practitioners seeking to improve education outcomes and alleviate poverty, especially in developing countries.