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Effect of Growing Up Poor on Labor Market Outcomes: Evidence From Indonesia

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  • Mayang Rizky
  • Daniel Suryadarma
  • Asep Suryahadi

Abstract

We estimate the long‐term impact of child poverty on adult labour market outcomes in Indonesia, a middle‐income country. Our instrumental variable estimation shows that a child who lived in a poor family when aged between eight and 17 years old suffers from an 87% earnings penalty as adults relative to a child who did not grow up in a poor family. The direct effect remains large after we account for a large set of mediators. Depending on the set of mediators that we use, we estimate an earnings penalty of between 85% and 90%. Similarly, we do not find any evidence that receiving various government transfer programs mediates the effect of growing up poor on earnings as adults.

Suggested Citation

  • Mayang Rizky & Daniel Suryadarma & Asep Suryahadi, 2025. "Effect of Growing Up Poor on Labor Market Outcomes: Evidence From Indonesia," Journal of International Development, John Wiley & Sons, Ltd., vol. 37(4), pages 938-950, May.
    • Handle: RePEc:wly:jintdv:v:37:y:2025:i:4:p:938-950
    DOI: 10.1002/jid.3993
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