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This paper studies educational aspirations and grade achievements of teenagers in India, using Structural Equation Modelling with data from the Young Lives Study. The analysis differentiates direct effects of relevant socio-economic and individual characteristics on educational output from indirect effects through aspirations. In this sample, some student characteristics – parents' education, mothers' caste and the student's gender – have no direct effect on educational output, but an indirect effect on educational aspirations going through abilities. Students from disadvantaged backgrounds, and in particular girls, are at a disadvantage at age 12 because they have accumulated lower cognitive abilities. Abilities shape aspirations, which then impact educational output beyond the mere effect of abilities. Girls are at a double disadvantage: besides lower average skills at age 12, they developed lower aspirations than boys of the same characteristics. The economic situation of the household was neither directly nor indirectly related with students' achievements in school. These results help distinguish aspirations as drivers of behaviour from aspirations as correlates of other characteristics, and they have relevant policy implications. [ABSTRACT FROM AUTHOR]

The analysis of household wealth dynamic remains an important methodology in the identification of poverty traps. To overcome measurement issues in survey data, livelihoods-based approaches of the dynamics of poverty are typically examined using panel regressions of a livelihoods regression on household assets and other socio-economic factors over time. In this paper, we characterise the livelihoods regression as a 'livelihoods technology', and use a latent class-technology approach to account for heterogeneity in how households generate a livelihood. We use a detailed dataset from rural India covering 213 households across 2001–2014, and control for selection issues through a Heckman Selection model. Our results are the first in the wealth dynamics literature to show that substantial heterogeneity exists in the technologies with which households generate their livelihoods. Importantly, we show that accounting for heterogeneity in household livelihoods 'technologies' more readily identifies different equilibria in wealth levels and provides previously foregone information on who is poor and why they remain poor. [ABSTRACT FROM AUTHOR]

This paper investigates whether aspirations matter for education, which offers a common route out of poverty. We find that mother aspirations are strongly related to the child's grade achieved at age 18. The relation is nonlinear, suggesting there is a threshold, and depends on caste, household income and the village setting. The coefficients remain large and significant when applying control function estimation, using first born son as instrument. A similar strong relation is observed with learning outcomes, including local language, English and maths test results, and with attending school, but not with attending private education. These results are confirmed for outcomes at age 15. The findings provide direct evidence on the contribution of mother aspirations to children's education outcomes and point to aspirations as a channel of intergenerational mobility. They suggest that education outcomes can be improved more rapidly by taking aspirations into account when targeting education programmes, and through interventions that shape aspirations. [ABSTRACT FROM AUTHOR]