Do income shocks play a determining role in children's schooling in the presence of credit market imperfection in Cameroon?

Abstract This paper examines the determinants of children's schooling under imperfect credit market conditions in Cameroon, with a particular focus on the role of monetary and non-monetary shocks. Households that are more vulnerable to shocks have a greater incentive to build up a buffer stock to protect themselves against unforeseen negative shocks, and keeping children out of school may be part of such a strategy. The study uses microeconomic data from the fourth Cameroonian Household Survey (ECAM IV) conducted in 2014 by the National Institute of Statistics (INS) and an instrumental variable Probit model to demonstrate its point. The results show that uncertainty about household income as measured by transitory income and declining household income decrease the probability of children attending school in Cameroon. The same is true for increasing household size. Nevertheless, access to the credit market is a factor of household resilience to shocks.Classification JEL: E24, I21, I31, O15.