Essays on Income Shocks and Human Capital

Human capital is an important predictor of economic growth. A higher initial stock of human capital boosts productivity and encourages knowledge diffusion, thereby generating higher levels of growth. Given its importance in determining growth, it is imperative to study the mechanisms through which human capital accumulation is affected. This is particularly important in the context of low-income countries that perform poorly on indicators relating to the quality and quantity of human capital accumulation. What follows are three essays that explore the topic of human capital accumulation for developing countries. The chapters explore the implications of income shocks for human capital accumulation both at the household level as well as at the school level. The first chapter surveys the literature on income shocks and its impact on human capital. The second and third chapters explore the impact of income shocks, such as aggregate income shocks and idiosyncratic income shocks, on human capital accumulation at the school and household levels in selected low-income countries. These shocks impact human capital accumulation through two main effects: the purchasing power of households and