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Child Wellbeing and Economic Development: Evidence from Indonesia

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Child Wellbeing and Economic Development: Evidence from Indonesia FACULTY OF THE PROFESSIONS SCHOOL OF ECONOMICS CHILD WELLBEING AND ECONOMIC DEVELOPMENT: EVIDENCE FROM INDONESIA a thesis by DANUSHA GUNASEELA JAYAWARDANA submitted in partial fulfilment of the requirements for the degree of Doctor of Philosophy September, 2020 Table of Contents List of Tables v List of Figures viii Abstract ix Declaration xi Acknowledgements xii Chapter 1: Introduction 1 1.1 Background................................... 1 1.2 Researchquestions ............................... 2 1.3 Indonesiaasacasestudy ........................... 3 1.3.1 High prevalence of child labour and child marriage in Indonesia . 3 1.3.2 Theavailabilityofarichdatasource . 4 1.4 Structureofthethesis ............................. 5 References . 8 Chapter 2: Happily Ever After? Mental Health Effects of Early Marriage 10 StatementofContributions ............................. 11 Abstract........................................ 12 2.1 Introduction................................... 13 2.2 Background ................................... 16 2.2.1 Global estimates of early marriages and mental health . 16 2.2.2 ChildmarriageinIndonesia . 17 2.2.3 MentalhealthinIndonesia . 18 2.3 ReviewofLiterature .............................. 19 2.4 Data . 21 2.4.1 Datasourceandsampleofinterest . 21 2.4.2 Early marriage status . 22 i 2.4.3 Outcomevariable............................ 24 2.4.4 Othercovariates ............................ 25 2.4.5 Descriptivestatistics . 26 2.5 EstimationStrategy .............................. 27 2.5.1 Panel fixed effects model . 27 2.5.2 Coarsened exact matching combined with difference-in-difference estimator ................................ 29 2.5.3 Instrumentalvariableframework . 31 2.6 EmpiricalResults................................ 34 2.6.1 Fixed effects model estimations . 34 2.6.2 Matched difference-in-difference estimation results . 36 2.6.3 Instrumentalvariableestimation . 39 2.7 RobustnessChecks ............................... 40 2.7.1 Placebo test - False treatment group . 40 2.7.2 Restrictingthesampletoonlymarriedwomen . 42 2.7.3 Relaxingageandmaritalstatusrestrictions . 44 2.7.4 Testingmodelrobustness . 46 2.7.5 Matchingwithmorevariables . 48 2.7.6 Useofageatmarriagetodenoteearlymarriage . 49 2.8 Discussion.................................... 53 2.8.1 Interpretationofresults . 53 2.8.2 Mechanismsandimplications . 56 2.9 Conclusion.................................... 58 Appendix A . 60 References . 82 Chapter 3: The Long Shadow of Child Labour on Adolescent Mental Health 90 StatementofContributions ............................. 91 Abstract........................................ 92 3.1 Introduction................................... 93 3.2 Background ................................... 96 ii 3.2.1 Global estimates of child labour and mental health . 96 3.2.2 ChildlabourandmentalhealthinIndonesia. 96 3.3 RelatedLiterature ............................... 97 3.4 Data . 101 3.4.1 Datasourceandsampleofinterest . 101 3.4.2 Outcomevariable............................ 102 3.4.3 Othercovariates ............................ 103 3.4.4 Descriptivestatistics . 105 3.5 Methodology .................................. 106 3.5.1 Identificationissues. 106 3.5.2 Identification strategy - Instrumental variable (IV) framework . 108 3.5.3 Estimationequation . 110 3.5.4 Empiricalmodel ............................ 111 3.6 EmpiricalResults................................ 112 3.6.1 First-stageestimates . 112 3.6.2 The effectofchildworkonmentalhealth . 115 3.6.3 The effect of other covariates on mental health . 117 3.6.4 Mediatingfactors............................ 118 3.7 RobustnessChecks ............................... 121 3.7.1 Alternativedefinitionofchildlabour . 121 3.7.2 Different model specifications . 122 3.7.3 The effect on short-term emotional wellbeing . 123 3.7.4 Sensitivity to potential violations of exclusion restriction of the instrument ............................... 124 3.8 Discussion.................................... 126 3.9 Conclusion.................................... 128 Appendix B . 130 References . 150 Chapter 4: Can unconditional in-kind transfers keep children out of work and in school? Evidence from Indonesia 158 StatementofContributions . 159 iii Abstract........................................160 4.1 Introduction................................... 161 4.2 Effects of social protection on child labour and school drop-outs . 163 4.2.1 Cashtransfers.............................. 164 4.2.2 Conditionalin-kindtransfers . 166 4.2.3 Othersocialprotectiontools. 167 4.3 Background ................................... 168 4.3.1 Globalestimatesofchildlabourandeducation . 168 4.3.2 ChildlabourandeducationinIndonesia . 170 4.3.3 TheRaskinprogram .......................... 171 4.4 Theoretical Framework . 173 4.5 Data . 175 4.5.1 Datasource,sampleandvariabledefinitions . 175 4.5.2 Descriptivestatistics . 176 4.6 EmpiricalStrategy ............................... 179 4.6.1 Coarsened exact matching . 181 4.6.2 Matched difference-in-differences . 182 4.6.3 Empiricalmodel ............................ 183 4.7 EmpiricalResults................................ 185 4.7.1 Coarsened exact matching results . 185 4.7.2 Bivariateprobitestimates . 186 4.7.3 Gender heterogeneity . 188 4.8 RobustnessChecks ............................... 190 4.8.1 Testingmodelrobustness . 190 4.8.2 Alternativematching. 192 4.9 Interpretation and Comparison with Related Literature . 194 4.10 ConclusionandPolicyImplications . 195 Appendix C . 197 References . 212 Chapter 5: Concluding Remarks 218 iv List of Tables Chapter 1: Introduction 1 Chapter 2: Happily Ever After? Mental Health Effects of Early Marriage 10 Table 2.1 Distribution of age at marriage of previous studies . 23 Table2.2 Transitionprobabilitiesforearlymarriage . 24 Table 2.3 Effect of early marriage on mental health - OLS, RE and FE results 35 Table 2.4 Effect of early marriage on mental health - DD estimates . 38 Table 2.5 Effect of early marriage on mental health - IV estimates . 39 Table 2.6 Robustness check: Placebo test with a false treatment group . 41 Table 2.7 Robustness check: Sample with only married women . 43 Table 2.8 Robustness check: Relaxing marital status and age restrictions . 45 Table 2.9 Robustness check: Different model specifications . 47 Table2.10 Robustnesscheck: Unobservableselection . 48 Table2.11 Robustnesscheck: Alternativematching . 49 Table 2.12 Robustness check: Effect of age at marriage on mental health . 53 Table A.1 The 10-item Centre for Epidemiological Studies Depression Scale . 60 TableA.2 VariableDescription . 61 TableA.3.1 SummaryStatistics . 62 TableA.3.2 SampleMeansbyWaves. 63 TableA.4 OLS,REandFEestimationresults . 64 Table A.5 Difference-in-difference estimates . 66 TableA.6 Regressiononearlymarriage . 68 TableA.7 Coarsenedexactmatchingsummary . 69 TableA.8 Covariatebalance ........................... 69 TableA.9 IVestimates .............................. 70 Table A.10 Placebo test with a false treatment group . 72 TableA.11 Restrictingthesampletoonlymarriedwomen . 74 TableA.12 Maritalstatusandagerestrictions . 76 v TableA.13 Alternativematching . 78 Table A.14 Coarsened exact matching summary . 79 TableA.15 Covariatebalance . .. 79 TableA.16 CREandHTestimations . 80 Chapter 3: The Long Shadow of Child Labour on Adolescent Mental Health 90 Table3.1 Firststageestimationresults . 113 Table 3.2 Descriptive statistics of parent’s employment types . 114 Table 3.3 The effect of child work on mental health . 115 Table 3.4 Mediating factors: Effect of religiosity and social capital . 121 Table 3.5 The effect of child work on mental health - Alternative definition . 122 Table 3.6 Robustness checks with different model specifications . 123 Table 3.7 Child labour effect on emotions . 124 Table B.1 The 10-item Centre for Epidemiological Studies Depression Scale . 130 TableB.2 Variabledescription . 131 TableB.3 Summarystatistics. 133 Table B.4 The effectofchildworkonmentalhealth . 135 TableB.5 Jointsignificanceofgroupsofcovariates . 137 Table B.6 The effect of work heterogeneity on mental health . 138 Table B.7 Estimation using a dummy variable to denote depression . 141 Table B.8 Mediating factors: Effect of religiosity and social capital . 144 Table B.9 Child labour effect on short-term emotions . 147 Chapter 4: Can Unconditional In-kind Transfers Keep Children Out of WorkandinSchool?EvidencefromIndonesia 158 Table 4.1 EffectofRaskinonchildlabourandschooling . 187 Table 4.2 Effect of Raskin by gender . 189 Table4.3 ModelRobustness ........................... 191 Table 4.4 Bivariate probit estimates with alternative matching . 193 TableC.1 Variabledescription . 197 TableC.2 Summarystatistics. 198 TableC.3 Probitestimationformatching . 199 vi Table C.4 Coarsened exact matching summary . 200 TableC.5 Covariatebalance ........................... 200 Table C.6 Bivariate pobit model with and without CEM weights . 201 Table C.7.1 Average marginal effects of the bivariate probit model . 203 Table C.7.2 Average marginal effects of the probit model . 204 Table C.8 Actual and predicted probabilities . 204 Table C.9 Bivariate probit model by gender . 205 Table C.10 Average marginal effects by gender . 207 Table C.11 Coarsened exact matching summary . 209 TableC.12 Covariatebalance . 209 Table C.13 Bivariate probit estimates with alternative matching . 210 Chapter 5: Concluding Remarks 218 vii List of Figures Chapter 1: Introduction 1 Chapter 2: Happily Ever After? Mental Health Effects of Early Marriage 10 Figure 2.1 Distribution of age at marriage . 22 Figure2.2 Thedistributionofmentalhealthscore . 27 Figure2.3 Thedistributionofageatmenarche
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