Complementarities and Intergenerational Educational Mobility: Theory and Evidence from Indonesia
Nazmul Ahsan,
M. Shahe Emran and
Forhad Shilpi
MPRA Paper from University Library of Munich, Germany
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
Keywords: Intergenerational Educational Mobility; Complementarity; Convex Mobility Curve; School Quality; Rural-Urban Divide; Returns to Education; Coresidency; Sample Truncation; Ability Heterogeneity; Developing Countries; Indonesia (search for similar items in EconPapers)
JEL-codes: J62 O12 (search for similar items in EconPapers)
Date: 2021-12-16
New Economics Papers: this item is included in nep-dev, nep-edu, nep-sea and nep-ure
References: Add references at CitEc
Citations: View citations in EconPapers (3)
Downloads: (external link)
https://mpra.ub.uni-muenchen.de/111125/1/MPRA_paper_111125.pdf original version (application/pdf)
Related works:
Journal Article: Complementarities and intergenerational educational mobility: Theory and evidence from Indonesia (2024) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:111125
Access Statistics for this paper
More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().