Property rights and human capital investment.

In this paper, we study the effect of land titling on investment in human capital. We first develop a theoretical model of the investment in the presence of property rights to agricultural land and then test the predictions of the model regarding the schooling decisions of households using data from Mexico's PROCEDE land titling program. Using the staggered introduction of land titling, we find that ownership tilted the balance in favor of investment in human capital in the form of schooling. Titling decreased the hazard rate of dropping out of school by 14% for children between the ages of 6 and 18. Additionally, including the effects of the contemporaneous conditional cash transfer program further reduced the hazard rate of dropping out by 34%. We find that these results hold even when the head of the household changes or migrates. Titling has a significant effect on female children but not on extremely poor families. [ABSTRACT FROM AUTHOR]