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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.
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  • Mayang Rizky & Daniel Suryadarma & Asep Suryahadi, "undated". "Effect of Growing Up Poor on Labor Market Outcomes: Evidence from Indonesia," Working Papers 2020, Communications Section.
    • Handle: RePEc:agg:wpaper:2020
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    References listed on IDEAS

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    Keywords

    child poverty; Indonesia; instrumental variable; labor market outcomes;
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