Journal of Economics and Economic Education Research (Print ISSN: 1533-3590; Online ISSN: 1533-3604)


Migrant Worker Cash Transfer Effect on Children Education

Author(s): Hermanto Joesoef Moestopo

The motivation of the study is to examine the impact of the migrant worker cash transfer on the children’s school attendance in Indonesia and whether the proportion of school attendance of children receiving cash transfer and proportion of school attendance of children not receiving cash transfer is having the same effect. Methodology and data: The multiple cross-section regression models were applied by using 2SLS and Probit regression method to examine the effect of cash transfer as an exogenous variable, and individual vector, parents, and household as control variables on school attendance of the child as an endogenous variable. The data sourced from Indonesia's Family Life Survey-5 (IFLS-5) year 2014 covering 19 provinces with total observations of 16.024 households obtained from Rand Corporation and field interviews held in 2015. Based on empirical analysis, the main finding is that the cash transfer has a significant positive effect in increasing children school attendance and the expenditure for children education, nevertheless, the children originated from household receiving cash remittance tends to have lower school attendance vis-à-vis children originated from household not receiving the cash transfer. The novelty of this study is the fact that the cash transfer will eventually demotivate children to attend school. As policy considerations, it is advised to anticipate the migration effects when evaluating the effect of cash transfer on children's schooling attendance or when updating migration policies and to improve the availability of facilities and basic infrastructure for school-age children.