Writing & research output

We examine the impact of the social norm of intergenerational support to aging parents on fertility and education investment decisions in developing economies. We develop a life cycle model with endogenous fertility and education investment choices and incorporate the expectation of transfers from children based on the social norm. Using household survey data from Indonesia, we estimate earnings profiles and uncertainties over the life cycle to capture the financial constraint that parents face and the transfers from adult children to parents, which indicate the current strength of the norm in the 2000s. The model is estimated to match key moments in fertility and education. Counterfactual experiments show that a weakening of the norm could reduce the fertility rate and significantly affect educational attainment, highlighting the importance of intergenerational transfers in shaping fertility and education decisions and in explaining intergenerational education mobility in developing economies.

How is low fertility associated with low income? I propose an explanation in the interactive effects of two market failures: a borrowing constraint (restricted access to the financial market) and a property-right constraint (the limited right of parents over children’s income). I construct and analyse a life cycle model of endogenous fertility, education investment, and two-sided intergenerational transfer where both constraints are present. Lower-income families are more likely to face the restrictions, which dampens fertility and education to inefficiently low levels — suggesting that at the aggregate level, low fertility associated with low income reflects a poor society struggling against binding constraints. Although the observable distortion is ruled by whichever constraint dominates, the other remains silently active, so policy addressing fertility-related inefficiency must account for both frictions.

I take a deeper dive into labor market dynamics to better understand the factors shaping parental decisions in developing economies. I document the highly persistent informal sector, the earnings gap between formal and informal sectors, and the effect of parents’ social network (proxied by their working-sector status) on children’s occupation. Inequality in the opportunity to secure a good job — particularly in the formal sector — distorts education investment by creating differing returns to education. When measures improve equality in job opportunities, education investment increases, particularly for children whose parents work in the informal sector.

This study examines consumption and earnings inequality over the life cycle in developing countries, focusing on differences between formal- and informal-worker households. Using data from Thailand, Indonesia, and Vietnam, we explore how these inequalities change with age and assess the level of risk sharing available, comparing patterns with developed countries like the U.S. Consumption inequality is not consistently lower than earnings inequality among younger formal-worker households, indicating limited capability to insure against earnings risk. Among informal-worker households, life-cycle inequality of earnings and consumption is flatter, with consumption inequality generally lower than earnings inequality — suggesting a higher degree of risk sharing despite the lack of employment protection and government welfare. Using recent Thai survey data, the study also finds a significant increase in earnings and consumption inequality among younger households during the COVID-19 pandemic.

Over the past six decades, fertility rates have declined significantly across most middle- and low-income countries. We develop a quantitative model that integrates endogenous human capital and fertility decisions while incorporating social norms related to filial piety — specifically, the obligation to support aging parents — to capture the observed dynamics of fertility and intergenerational transfers in middle- and low-income countries.

We examine income patterns across the lifespan in developing economies, covering both formal and informal employment. Using panel survey data from Indonesia and Vietnam — where over 70% of the workforce is informal — we follow Deaton’s (1997) methodology to estimate earnings profiles across the life cycle, considering employment type, cohort, and year effects. With robustness checks including propensity score matching and an instrumental-variable approach, we find that earnings profiles in both sectors are concave, mirroring developed economies, though growth is lower. Transitions between sectors are infrequent, especially from informal to formal, yet a substantial and consistent formal-sector wage premium exists in both countries.