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Complementarities and intergenerational educational mobility: Theory and evidence from Indonesia

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  • Ahsan, Md Nazmul
  • Emran, M. Shahe
  • Shilpi, Forhad

Abstract

We adapt the Becker et al. (2015) model to study intergenerational educational mobility in Indonesia with a focus on the role of complementarities. We develop an empirical methodology for testing whether parental financial investment is complementary to school quality and parent’s education. The empirical analysis is based on two estimating equations derived from the model: a quadratic mobility equation specifying the association between a father’s and his children’s schooling, and a linear investment equation specifying the optimal financial investment in children’s schooling as a function of fathers’ schooling. We find that the mobility curve is convex in rural, and linear in urban areas, even though parental education is complementary to financial investment in both locations. School quality is complementary to investment in all rural households but only in educated urban households. It is a substitute in uneducated urban households. Public investment in school quality is expected to improve absolute mobility in most households, but worsen relative mobility.

Suggested Citation

  • Ahsan, Md Nazmul & Emran, M. Shahe & Shilpi, Forhad, 2024. "Complementarities and intergenerational educational mobility: Theory and evidence from Indonesia," Journal of Economic Behavior & Organization, Elsevier, vol. 225(C), pages 170-191.
    • Handle: RePEc:eee:jeborg:v:225:y:2024:i:c:p:170-191
    DOI: 10.1016/j.jebo.2024.05.025
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    Cited by:

    1. Ahsan, Md. Nazmul & Emran, M. Shahe & Jiang, Hanchen & Han, Qingyang & Shilpi, Forhad, 2022. "Growing Up Together: Sibling Correlation, Parental Influence, and Intergenerational Educational Mobility in Developing Countries," GLO Discussion Paper Series 1123, Global Labor Organization (GLO), revised 2022.
    2. Ahsan, Md Nazmul & Emran, M. Shahe & Shilpi, Forhad, 2024. "On the Rank-Rank Model of Intergenerational Mobility: Pitfalls for Policy Evaluation," MPRA Paper 121676, University Library of Munich, Germany.
    3. Ahsan, Md. Nazmul & Emran, M. Shahe & Jiang, Hanchen & Shilpi, Forhad, 2022. "What the Mean Measures of Mobility Miss: Learning About Intergenerational Mobility from Conditional Variance," GLO Discussion Paper Series 1097, Global Labor Organization (GLO).

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    More about this item

    Keywords

    Intergenerational educational mobility; Complementarity; Test of complementarity; Convex mobility curve; School quality; Rural-urban divide; Developing countries; Indonesia;
    All these keywords.

    JEL classification:

    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality

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