Understanding the Spatial and Temporal Effect of Economic Activity on the Quality of Education: Evidence from Colombia

This study estimates the effects of economic activity on the quality of education in various regions of Colombia. To estimate this effect, we first calculate an index of quality of education. Second, we use a spatial regression model to estimate the effect of the spatial heterogeneity of the regions on this index of quality. Third, we use a dynamic data panel methodology and instrumental variables to estimate a causal relationship, where electricity consumption data and light intensity from satellite images are used to measure the economic activity. The principal results show that economic activity has a positive effect on the quality of education and the effects are persistent over time. However, the effects of the previous quality of education on current quality disappear over time. Therefore, the quality of education does not reproduce endogenously in time. These findings have practical implications for research on education and for comparative education.