Sanitation conditions and education outcomes in Brazilian municipalities

Abstract

This article investigates the effect of sanitation on education at the municipal level in Brazilian cities. We measure the effect of the share of people living in households with access to piped water and a bathroom on educational indicators of the population aged 6–14. To take care of the well‐recognized endogeneity between sanitation and education, we estimate a panel‐data instrumental variable model. We use the municipalities that had their sanitation services privatized by other subnational instances as an instrumental variable. The results indicate that an increase of 1 percentage point in access to sanitation increases grade promotion rate by 0.334 pp., decreases age‐grade distortion rate by 0.464 pp., and decreases school dropout by 0.33 pp. We show evidence of complementarity between educational and sanitation policies, and the educational impacts of the latter can be used as leverage to convince politicians of the necessity to provide better water and sanitation conditions, especially to the poor population.