INCOME, EDUCATIONAL ATTAINMENT, AND HOUSEHOLD INVESTMENT IN EDUCATION: EVIDENCE FROM HOUSEHOLD-LEVEL MICRODATA IN UZBEKISTAN

Human capital accumulation is recognized as a fundamental driver of economic growth, productivity, labor market performance, and long-term household welfare. Among the various forms of human capital investment, education plays a central role, enhancing individuals’ knowledge, skills, and productive capacities. Although an extensive international literature has examined the returns to education, educational attainment, and schooling outcomes across developed and developing countries, far less attention has been given to the household-level investment decisions that precede these outcomes – a gap that is especially evident in Uzbekistan, where empirical evidence on the factors associated with household investment in education remains limited. This thesis examines those factors using nationally representative Household Budget Survey microdata for the period 2023–2025. Educational expenditure serves as a direct measure of household investment in human capital, shifting the focus to household investment behavior rather than to labor market outcomes alone. Drawing on more than 48,100 households, the study estimates a baseline Ordinary Least Squares (OLS) model with regional and survey-year fixed effects. Robustness analyses employ alternative estimators, including Tobit and participation-logit models, as well as alternative measures of educational investment, including expenditure shares and per-capita and per-child expenditure. Household income emerges as the most robust factor associated with educational expenditure. The quadratic specification identifies a positive but diminishing association between household income and educational expenditure, indicating that educational spending increases with household income at a decreasing rate, consistent with a nonlinear income-expenditure relationship. Households with more children allocate significantly more to education. The conditional association of the household head’s educational attainment weakens substantially once income and other characteristics are controlled for. The study contributes to the literature on human capital formation, household welfare, and educational inequality by providing one of the first microeconometric analyses of household educational expenditure using nationally representative data from Uzbekistan. The findings also carry evidence-based policy implications for reducing financial barriers to educational investment, promoting more equitable opportunities for human capital accumulation, and supporting long-term socio-economic development.