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Complementarities and intergenerational educational mobility: Theory and evidence from Indonesia

Author

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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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    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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