The Role of Public Policy and Economic Inequality on Intergenerational Mobility Trends in Indonesia

Abstraksi

Over the last two decades, economic inequality has been increasing in Indonesia. It has been suggested that this would have an adverse impact on the intergenerational transmission of schooling. To promote mobility, the government has implemented several progressive policies since the late 2000s. However, there has been no recent study conducted to explore the impact of its reforms on educational mobility. Using the largest household survey, the IFLS, this study attempts to explore intergenerational mobility trends in Indonesia almost two decades after the Asian financial crisis. There are four waves of survey employed to measure the correlation between fathers’ education and children’s education. The multiple datasets enable identification of the potential causal mechanisms underlying the trends and patterns. This study found that there has been a considerable rise in intergenerational mobility in the country. The significant increase in education expenditure and the improvement of early childhood care are believed to play a major role in this change. The consistently larger coefficient of the persistence of students in the cities suggests that economic inequality could prevent mobility. There is no significant difference regarding gender. The results indicate that external factors play a greater role than internal factors in intergenerational transmission. These results are expected to provide policy insight for policymakers and stimulate future research.