The intergenerational transmission of human capital: Evidence from Indonesia’s INPRES school construction program of the 1970s

Abstraksi

Investments in the provision of public education are seen as the main instruments by which governments can promote economic growth and human development and reduce disparities. When examining the social returns to such investments it is important to properly account for any spillover effects that may reach across generations – the intergenerational transmission of human capital. Numerous studies report on correlational evidence linking parental education and child outcomes, with maternal education playing an important role in determining child health. Most studies are not capable of inferring causality however. In the present study we investigate the causal impact of Indonesia’s INPRES Program in the 1970s on young children in pre-school and early primary school years in 2013. We link the timing and intensity of school construction under the INPRES program with the location and cohort of birth for individuals who are now caregivers, and examine the mechanisms that likely influence children contemporaneously: parenting styles and utilization of public educational services. We investigate child outcomes ranging from physical health to socio-emotional skills to test scores in Mathematics and Bahasa Indonesia. Our early results indicate that increased parental education improves a child’s health status, but has little influence on parenting styles. More educated caregivers are more aware of educational opportunities for their children and are more likely to take advantage of these opportunities. These children seem, therefore, to be achieving better learning outcomes than their peers, suggesting that the long-term impacts of the 1970’s INPRES program may be larger than previously believed.