世界发展银行-The-Rural-Urban-Divide-and-Intergenerational-Educational-Mobility-in-a-Developing-Country---Theory-and-Evidence-from-Indonesia_54页_533kb

Summary of "The Rural-Urban Divide and Intergenerational Educational Mobility in a Developing Country: Theory and Evidence from Indonesia"

Core Content

This paper examines the rural-urban divide in intergenerational educational mobility in Indonesia using a theoretically grounded empirical approach. It investigates how differences in education returns, school quality, and the role of peer and role model effects influence the educational outcomes of children from different backgrounds.

Main Findings

• Intergenerational Educational Mobility: The study finds that the relationship between parental education and children's education is convex in both rural and urban Indonesia, rejecting the linear model typically used in the literature. This convexity implies that the impact of parental education on children's schooling outcomes is not constant but varies depending on the level of parental education.

• Rural-Urban Relative Mobility: The relative mobility curves for rural and urban areas cross, with children from low-educated families enjoying higher relative mobility in rural areas, while the pattern flips for families where the father has more than nine years of schooling, favoring urban children.

• Absolute Mobility: Despite the relative mobility differences, rural children face lower absolute mobility across the entire distribution of parental schooling. This indicates that, on average, children in rural areas have less opportunity to move up the education ladder regardless of their parents' education level.

• Returns to Education: Education returns are higher in urban areas than in rural areas, both for parents and children. This is attributed to the skill-intensive nature of urban industries and the presence of agglomeration externalities.

• School Quality and Investment: The paper highlights that school quality is a substitute for parental financial investment in Indonesia, based on the intercepts of the mobility and investment equations. This suggests that public investment in rural schools could enhance both equity and efficiency in educational mobility.

• Peer and Role Model Effects:

  • In urban areas, peers are complementary to parental investment, but they do not generate the convexity in the mobility equation.
  • Role models in urban areas act as substitutes for financial investment, whereas in rural areas, they are separable from it.
  • These effects are not the main source of convexity, which is more likely driven by more efficient investment by educated parents.

Key Issues Addressed

• Sample Truncation Bias: The study uses the Indonesia Family Life Survey (IFLS) data, which avoids truncation bias due to coresidency by including information on non-resident parents.

• Ability Heterogeneity: The paper controls for cognitive ability using three measures from the IFLS 2014 data, allowing for a more accurate estimation of intergenerational mobility.

• Model Specification: The model extends the Becker et al. (2015) framework by incorporating:

  • Diminishing returns to financial investment.
  • Complementarity between parental education and financial investment.
  • Non-financial effects of parental education such as role models.
  • Child ability as a separate variable influencing the education production function.

Implications for Policy

• Public Investment in Rural Schools: The paper concludes that improving school quality in rural areas is a desirable policy, as it can act as a substitute for parental financial investment, thereby enhancing educational mobility and reducing inequality.

• Model Portability: The developed model and methodology are applicable to other developing countries, offering a broader framework for analyzing intergenerational educational mobility.

Structure of the Paper

1. Introduction: Sets the context of increasing inequality in developing countries and highlights the lack of research on rural-urban differences in intergenerational mobility.
2. Related Literature: Reviews the extensive literature on intergenerational mobility in developed countries and the limited but growing body of work in developing countries, especially in Indonesia.
3. Model Development: Presents an extended version of the Becker et al. (2015) model, incorporating the rural-urban divide in education returns and school quality, and the role of peer and role model effects.
4. Empirical Analysis: Uses IFLS data to estimate the convexity of the intergenerational mobility curve and the effects of parental investment and child ability.
5. Peer and Role Model Effects: Explores how peer and role model effects influence the educational outcomes of children, distinguishing between urban and rural settings.
6. Conclusion: Summarizes the findings and emphasizes the equity and efficiency benefits of improving rural school quality and the broader applicability of the model to other developing countries.

Key Equations and Concepts

• Education Production Function: Incorporates diminishing returns, complementarity, and the impact of child ability.
• Intergenerational Mobility Equation: Derived from the model, it is quadratic in nature and shows convexity in both rural and urban Indonesia.
• Optimal Investment Equation: Shows that parental investment in education is linear in parental education, leading to a quadratic relationship in the mobility equation.

Conclusion

The paper provides a nuanced understanding of the rural-urban divide in intergenerational educational mobility, highlighting the importance of school quality, parental investment, and child ability. It concludes that public investment in rural schools can significantly improve educational mobility and equity, and that the model developed is useful for policy analysis in other developing countries.