The Changing Relationship Between Family Size and Educational Attainment Over the Course of Socioeconomic Development: Evidence From Indonesia

PWP-CCPR-2004-017

Abstract

Studies from developed countries show a negative correlation between family size and children’s schooling while results from developing countries show that this association can range from positive to neutral to negative depending on the context. The body of evidence suggests that this relationship changes as a society develops but this theory has been difficult to assess because the existing evidence requires comparison across countries with different social structures and at different levels of development. The world’s fourth most populous nation, Indonesia has developed rapidly in recent decades. This context provides the opportunity to study these relationships within the same rapidly developing setting to see if and how these associations change. Results show that in urban areas the association between family size and children’s schooling was positive for older cohorts while for more recent cohorts family size and schooling are negatively related. Models using instrumental variables to address the potential endogeneity of fertility confirm these results. In contrast, rural areas show no significant association between family size and children’s schooling for any cohort. These findings highlight how the relationship between family size and children’s schooling can differ within the same country and change over time as contextual factors evolve with socioeconomic development.