Do positive income shocks benefit children's education? Evidence from Vietnam

This study investigates the causal effect of positive income shocks on education in Vietnam using the 1993 and 1998 Vietnam Living Standard Surveys. We measure income shocks by families' lottery winnings, controlling for lottery purchases. In general, lottery winnings have no significant effect on school enrolment. However, we find a positive and significant effect from lottery winnings on expenditure for children's education. A 1% increase in lottery winnings increases expenditure on children's education by 0.12%. Interestingly, we find a stronger effect from lottery winnings on school enrolment and expenditure for education for girls than for boys, helping to decrease gender inequality in education.