Schooling and Parental Death

Abstract

Loss of a parent is one of the most traumatic events a child can face. If loss of a parent reduces investments in children, it can also have long-lasting implications. This study uses parametric and seminonpara-metric matching techniques to estimate how one human capital investment, school enrollment, is affected by a parent's recent death. We analyze data from 600,000 households from Indonesia's National Socioeconomic Survey (Susenas) during 1994–1996. We find a parent's recent death has a large effect on a child's enrollment. We also use this shock to test several theories of intrahousehold allocation and find little differential treatment based on the gender of the child or the deceased parent.