ABSTRACT
Education and health/nutrition are both essential development outcomes and essential instruments for development. From a development policy perspective, education and health pose special problems because of two important features. The first is that there are strong positive social externalities associated with individual education and health achievements. The second feature is that many education and health services are public goods. In education, income shocks can induce parents to take children out of school because they need the child’s labor this year or because they cannot afford to cover school costs. In health, income shocks can reduce child nutrition during the critical first 1,000 days of life, compromising future child health and development. The educational attainment of a population is measured by completed years of schooling per adult in the population of age 25 years or older.
