Long-Term and Intergenerational Effects of Education: Evidence from School Construction in Indonesia

Abstract

Abstract We study long-term and intergenerational effects of the 1970s Indonesian school construction program. Exploiting variation across birth cohorts and districts in the number of schools built suggests that 43 years later men are more likely to work formally, outside agriculture, and migrate, and that men and women have better marriage market outcomes. Households with exposed women have higher living standards and pay more taxes. The mother's program exposure leads to increased schooling for her children, with larger effects in secondary and tertiary education. Cost-benefit analyses indicate that school construction leads to higher tax revenues and improved living standards, offsetting construction costs within 18–54 years.