The Effects of Education and Family Planning Programs on Fertility in Indonesia

Numerous studies indicate that female education is a major determinant of fertility and that the estimated effects are large relative to other variables, including family planning program variables. There are, however, two serious deficiencies in the research relating educational attainment to fertility that could give rise to invalid inferences. First, many public programs, including health and family planning programs, may influence a woman's decisions about education, and these indirect programmatic effects might be large. Second, nearly all existing studies of the impacts of education on fertility assume that a woman's educational attainment is exogenous. Education could be serving as a proxy for such unobservable determinants as ability, motivation, and parental background, as these factors most likely are important determinants of a woman's educational attainment. We use the 1993 Indonesian Family Life Survey to compare the estimated impacts of education on fertility from a simple model that assumes the exogeneity of education and an unobserved factor model that allows for endogeneity of schooling. The model imposing questionable exogeneity assumptions appears to overpredict the fertility-reducing effects of female education, better schools, and higher government health expenditures and to underpredict the importance of family planning programs for reducing fertility and for inducing young women to remain in school.