IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/111125.html
   My bibliography  Save this paper

Complementarities and Intergenerational Educational Mobility: Theory and Evidence from Indonesia

Author

Listed:
  • Ahsan, Nazmul
  • Emran, M. Shahe
  • Shilpi, Forhad

Abstract

We provide a theory based empirical analysis of the role of two types of complementarities in intergenerational educational mobility. We develop a model where parental financial investment in children’s schooling can be complementary to or a substitute of school quality and parent’s education level. Such complementarities can make the mobility equation convex with starkly different mobility patterns compared to the workhorse linear model. Mobility and investment equations derived from the model are estimated for Indonesia, using exceptional data that allow us to tackle two major sources of bias: coresidency and cognitive ability heterogeneity. We find that the mobility equation is convex in rural but linear in urban areas. The children of low educated fathers enjoy higher relative mobility in rural areas, while the urban children fare better in highly educated households. The standard linear model in rural areas incorrectly suggests no rural-urban gap in relative mobility. Theoretical insights help interpret the evidence, suggesting complementarity between financial investment and parental education in both rural and urban areas even though the mobility curve is linear in urban areas. We develop an approach to recover the parameters determining the interaction between school quality and parental investment. School quality is complementary to financial investment in rural areas, with stronger effect in more educated households. In urban areas, school quality is a substitute in low educated households, but complementary in the highly educated households. These results imply that public investment in school quality would lower relative mobility in Indonesia

Suggested Citation

  • Ahsan, Nazmul & Emran, M. Shahe & Shilpi, Forhad, 2021. "Complementarities and Intergenerational Educational Mobility: Theory and Evidence from Indonesia," MPRA Paper 111125, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:111125
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/111125/1/MPRA_paper_111125.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. repec:hal:pseose:halshs-00859751 is not listed on IDEAS
    2. Anthony B. Atkinson & Thomas Piketty & Emmanuel Saez, 2011. "Top Incomes in the Long Run of History," Journal of Economic Literature, American Economic Association, vol. 49(1), pages 3-71, March.
    3. Neidhöfer, Guido & Serrano, Joaquín & Gasparini, Leonardo, 2018. "Educational inequality and intergenerational mobility in Latin America: A new database," Journal of Development Economics, Elsevier, vol. 134(C), pages 329-349.
    4. Emran, M. Shahe & Shilpi, Forhad, 2015. "Gender, Geography, and Generations: Intergenerational Educational Mobility in Post-Reform India," World Development, Elsevier, vol. 72(C), pages 362-380.
    5. Bhashkar Mazumder, 2005. "Fortunate Sons: New Estimates of Intergenerational Mobility in the United States Using Social Security Earnings Data," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 235-255, May.
    6. Emran, M. Shahe & Jiang, Hanchen & Shilpi, Forhad, 2021. "Is Gender Destiny? Gender Bias and Intergenerational Educational Mobility in India," MPRA Paper 106793, University Library of Munich, Germany.
    7. Miles Corak, 2013. "Income Inequality, Equality of Opportunity, and Intergenerational Mobility," Journal of Economic Perspectives, American Economic Association, vol. 27(3), pages 79-102, Summer.
    8. Alberto Abadie & Susan Athey & Guido W Imbens & Jeffrey M Wooldridge, 2023. "When Should You Adjust Standard Errors for Clustering?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 138(1), pages 1-35.
    9. Jan F. Kiviet, 2013. "Identification and inference in a simultaneous equation under alternative information sets and sampling schemes," Econometrics Journal, Royal Economic Society, vol. 16(1), pages 24-59, February.
    10. James J. Heckman & Stefano Mosso, 2014. "The Economics of Human Development and Social Mobility," Annual Review of Economics, Annual Reviews, vol. 6(1), pages 689-733, August.
    11. M. Shahe Emran & Asadul Islam & Forhad Shilpi, 2020. "Distributional Effects of Corruption When Enforcement is Biased: Theory and Evidence from Bribery in Schools in Bangladesh," Economica, London School of Economics and Political Science, vol. 87(348), pages 985-1015, October.
    12. Gary S. Becker & Scott Duke Kominers & Kevin M. Murphy & Jörg L. Spenkuch, 2018. "A Theory of Intergenerational Mobility," Journal of Political Economy, University of Chicago Press, vol. 126(S1), pages 7-25.
    13. James J. Heckman & Chase O. Corbin, 2016. "Capabilities and Skills," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 17(3), pages 342-359, July.
    14. M. Shahe Emran & Forhad Shilpi, 2011. "Intergenerational Occupational Mobility in Rural Economy: Evidence from Nepal and Vietnam," Journal of Human Resources, University of Wisconsin Press, vol. 46(2), pages 427-458.
    15. Hertz Tom & Jayasundera Tamara & Piraino Patrizio & Selcuk Sibel & Smith Nicole & Verashchagina Alina, 2008. "The Inheritance of Educational Inequality: International Comparisons and Fifty-Year Trends," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 7(2), pages 1-48, January.
    16. David Card & Ciprian Domnisoru & Lowell Taylor, 2022. "The Intergenerational Transmission of Human Capital: Evidence from the Golden Age of Upward Mobility," Journal of Labor Economics, University of Chicago Press, vol. 40(S1), pages 39-95.
    17. Kiviet, Jan F., 2020. "Testing the impossible: Identifying exclusion restrictions," Journal of Econometrics, Elsevier, vol. 218(2), pages 294-316.
    18. Richard Akresh & Daniel Halim & Marieke Kleemans, 2023. "Long-Term and Intergenerational Effects of Education: Evidence from School Construction in Indonesia," The Economic Journal, Royal Economic Society, vol. 133(650), pages 582-612.
    19. Raj Chetty & Nathaniel Hendren & Patrick Kline & Emmanuel Saez, 2014. "Where is the land of Opportunity? The Geography of Intergenerational Mobility in the United States," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(4), pages 1553-1623.
    20. Black, Sandra E. & Devereux, Paul J., 2011. "Recent Developments in Intergenerational Mobility," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 16, pages 1487-1541, Elsevier.
    21. Alfonso Echazarra & Thomas Radinger, 2019. "Learning in rural schools: Insights from PISA, TALIS and the literature," OECD Education Working Papers 196, OECD Publishing.
    22. repec:dau:papers:123456789/12594 is not listed on IDEAS
    23. M. Shahe Emran & William Greene & Forhad Shilpi, 2018. "When Measure Matters: Coresidency, Truncation Bias, and Intergenerational Mobility in Developing Countries," Journal of Human Resources, University of Wisconsin Press, vol. 53(3), pages 589-607.
    24. Thomas Bossuroy & Denis Cogneau, 2013. "Social Mobility in Five African Countries," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 59, pages 84-110, October.
    25. Shahe Emran & Forhad Shilpi, 2019. "Economic approach to intergenerational mobility: Measures, methods, and challenges in developing countries," WIDER Working Paper Series wp-2019-98, World Institute for Development Economic Research (UNU-WIDER).
    26. Shinichi Nishiyama, 2000. "Measuring Time Preference and Parental Altruism: Technical Paper 2000-7," Working Papers 13333, Congressional Budget Office.
    27. Emran, M. Shahe & Jiang, Hanchen & Shilpi, Forhad, 2020. "Gender Bias and Intergenerational Educational Mobility: Theory and Evidence from China and India," MPRA Paper 99131, University Library of Munich, Germany.
    28. Takashi Kurosaki & Humayun Khan, 2006. "Human Capital, Productivity, and Stratification in Rural Pakistan," Review of Development Economics, Wiley Blackwell, vol. 10(1), pages 116-134, February.
    29. Solon, Gary, 1999. "Intergenerational mobility in the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 29, pages 1761-1800, Elsevier.
    30. O. Ashenfelter & D. Card (ed.), 1999. "Handbook of Labor Economics," Handbook of Labor Economics, Elsevier, edition 1, volume 3, number 3.
    31. Bhashkar Mazumder & Maria Rosales-Rueda & Margaret Triyana, 2019. "Intergenerational Human Capital Spillovers: Indonesia's School Construction and Its Effects on the Next Generation," AEA Papers and Proceedings, American Economic Association, vol. 109, pages 243-249, May.
    32. Kiviet, Jan, 2019. "Instrument-free inference under confined regressor endogeneity; derivations and applications," MPRA Paper 96839, University Library of Munich, Germany.
    33. Thomas, Duncan, 1996. "Education across Generations in South Africa," American Economic Review, American Economic Association, vol. 86(2), pages 330-334, May.
    34. Solon, Gary, 1992. "Intergenerational Income Mobility in the United States," American Economic Review, American Economic Association, vol. 82(3), pages 393-408, June.
    35. Tom Hertz & Tamara Jayasundera, 2007. "School Construction and Intergenerational Mobility in Indonesia," Working Papers 2007-18, American University, Department of Economics.
    36. Phillips, Joseph M, 1994. "Farmer Education and Farmer Efficiency: A Meta-Analysis," Economic Development and Cultural Change, University of Chicago Press, vol. 43(1), pages 149-165, October.
    37. Vegard Iversen & Anirudh Krishna & Kunal Sen, 2019. "Beyond Poverty Escapes—Social Mobility in Developing Countries: A Review Article," The World Bank Research Observer, World Bank, vol. 34(2), pages 239-273.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    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).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Emran, M. Shahe & Jiang, Hanchen & Shilpi, Forhad, 2021. "Is Gender Destiny? Gender Bias and Intergenerational Educational Mobility in India," GLO Discussion Paper Series 807, Global Labor Organization (GLO).
    2. Ahsan, Md Nazmul & Shilpi, Forhad & Emran, Shahe, 2022. "Unintended bottleneck and essential nonlinearity: Understanding the effects of public primary school expansion on intergenerational educational mobility," MPRA Paper 113047, University Library of Munich, Germany.
    3. M. Shahe Emran & Francisco H. G. Ferreira & Yajing Jiang & Yan Sun, 2023. "Occupational dualism and intergenerational educational mobility in the rural economy: evidence from China and India," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 21(3), pages 743-773, September.
    4. 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).
    5. Emran, M. Shahe & Jiang, Hanchen & Shilpi, Forhad, 2020. "Gender Bias and Intergenerational Educational Mobility: Theory and Evidence from China and India," GLO Discussion Paper Series 497, Global Labor Organization (GLO).
    6. Shahe Emran & Forhad Shilpi, 2019. "Economic approach to intergenerational mobility: Measures, methods, and challenges in developing countries," WIDER Working Paper Series wp-2019-98, World Institute for Development Economic Research (UNU-WIDER).
    7. Emran, M. Shahe & Ferreira, Francisco & Jiang, Yajing & Sun, Yan, 2019. "Intergenerational Educational Mobility in Rural Economy: Evidence from China and India," MPRA Paper 94121, University Library of Munich, Germany.
    8. Ercio Muñoz, 2021. "The Geography Of Intergenerational Mobility In Latin America And The Caribbean," Papers 2021_02, Centro de Estudios Espinosa Yglesias.
    9. Emran, M. Shahe & Shilpi, Forhad, 2017. "Estimating Intergenerational Mobility with Incomplete Data: Coresidency and Truncation Bias in Rank-Based Relative and Absolute Mobility Measures," MPRA Paper 80724, University Library of Munich, Germany.
    10. Guido Neidhöfer, 2019. "Intergenerational mobility and the rise and fall of inequality: Lessons from Latin America," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 17(4), pages 499-520, December.
    11. M. Shahe Emran & William Greene & Forhad Shilpi, 2018. "When Measure Matters: Coresidency, Truncation Bias, and Intergenerational Mobility in Developing Countries," Journal of Human Resources, University of Wisconsin Press, vol. 53(3), pages 589-607.
    12. Aydemir, Abdurrahman B. & Yazici, Hakki, 2019. "Intergenerational education mobility and the level of development," European Economic Review, Elsevier, vol. 116(C), pages 160-185.
    13. Cobb-Clark, Deborah A. & Dahmann, Sarah C. & Salamanca, Nicolás & Zhu, Anna, 2022. "Intergenerational disadvantage: Learning about equal opportunity from social assistance receipt," Labour Economics, Elsevier, vol. 79(C).
    14. Guo, Ningning, 2022. "Hollowing out of opportunity: Automation technology and intergenerational mobility in the United States," Labour Economics, Elsevier, vol. 75(C).
    15. Emran, M. Shahe & Sun, Yan, 2014. "Are the Children of Uneducated Farmers Doubly Doomed? Farm, Nonfarm and Intergenerational Educational Mobility in Rural China," MPRA Paper 59230, University Library of Munich, Germany.
    16. Bhashkar Mazumder, 2018. "Intergenerational Mobility in the United States: What We Have Learned from the PSID," The ANNALS of the American Academy of Political and Social Science, , vol. 680(1), pages 213-234, November.
    17. Hanol Lee & Jong‐Wha Lee, 2021. "Patterns and determinants of intergenerational educational mobility: Evidence across countries," Pacific Economic Review, Wiley Blackwell, vol. 26(1), pages 70-90, February.
    18. Huang, Xiao & Huang, Shoujun & Shui, Ailun, 2021. "Government spending and intergenerational income mobility: Evidence from China," Journal of Economic Behavior & Organization, Elsevier, vol. 191(C), pages 387-414.
    19. Alberto Alesina & Sebastian Hohmann & Stelios Michalopoulos & Elias Papaioannou, 2021. "Intergenerational Mobility in Africa," Econometrica, Econometric Society, vol. 89(1), pages 1-35, January.
    20. Emran, M. Shahe & Greene, William H & Shilpi, Forhad, 2015. "When measure matters: coresident sample selection bias in estimating intergenerational mobility in developing countries," MPRA Paper 65920, University Library of Munich, Germany.

    More about this item

    Keywords

    Intergenerational Educational Mobility; Complementarity; Convex Mobility Curve; School Quality; Rural-Urban Divide; Returns to Education; Coresidency; Sample Truncation; Ability Heterogeneity; 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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:111125. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.