In this article, we start to bridge the gap and contribute to the debate about how to curb the loss of tropical rain forests. We do so by estimating the effect that one additional year of a household head's schooling might have on how much area of old-growth forest is cleared by an Amerindian household each year; we also assess the magnitude of the positive environmental externality produced by the additional year of schooling. We show that one more year of schooling of the household head correlates with 13.2%-21.5% less annual area of old-growth fores cut by a household. We go on to show that, depending on the assumption one makes about the economic value of secondary-growth forest, each Amerindian household produces annual benefits to the rest of the world worth US$146. The benefits come from preserving the use and the nonuse values of tropical rain forests that are enjoyed by people who live outside of the forest. Since children in lowland Amerindian societies spend much of their time working in the household and on the farm, we conclude by arguing that governments should compensate parents with a direct annual transfer equal to US$146 per household so that parents find it worthwhile to enroll their children in school. To estimate the effect of schooling on tropical deforestation we draw on information from a recent household survey we conducted of four Amerindian societies in the tropical lowlands of Bolivia: Tsimané, Mojeño, Yuracaré, and Chiquitano. We designed the survey to examine he link between human capital and the use of natural resources from the rain forest. The survey contains information on the different types of forests that were cleared, the formal schooling of the household heads and of their parents, the results of tests of literacy and arithmetic, and a measure of private time preferences that we elicited through an experiment at the time of the survey.
