Schooling and Parental Death

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 semi-nonparametric 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 1994-96. 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 intra-household allocation and find little differential treatment based on the gender of the child or the deceased parent.