Research Activities
Research Projects 2025
Does labor market volatility reduce education? Evidence from Indonesia
Outline
We propose to study the influence of labor market changes and volatility on educational decisions by children from lower-income Indonesian households. Indonesia’s economy is growing rapidly but educational development has lagged. Even among young workers (aged 25-29), over 50% have only lower secondary schooling. Income growth improves school attainment, but rapidly changing economic structure and volatility from trade or macroeconomic shocks introduces uncertainty about which occupations will be most in demand, and what level or type of skills will give the highest and safest return. Uncertainty is known to cause risk-aversion: economically vulnerable individuals will prefer lower but more predictable returns. Uncertainty about returns to higher schooling grades may accelerate their school-to-work transition even if returns to more schooling are high. We will explore this in collaboration with a prominent Indonesian research institute using data from national household and labor force surveys. This work will improve understanding of the school-to-work decision, and inform educational development policy.
Period
April 2025 - March 2027
Members
| Role | Member |
|---|---|
| [ Organizer ] | Coxhead, Ian |
| [ Co-researcher ] | Bills, Jacob(University of Wisconsin-Madison Doctoral candidate) |
*Affiliations are as of April 2025.
Expected Outcome
- Paper Submission to Peer-Reviewed Journal