Parental risk attitudes and child cognitive outcome in Indonesia

The empirical link between children's cognitive ability and parental risk attitudes has been understudied. Specifically, an individual’s educational outcome may reflect the decisions made on their behalf by parents, reflecting their risk attitudes. This paper aims to fill gaps in the existing literature by investigating whether parental risk preferences influence the cognitive ability of children in Indonesia. Using a dataset from the fifth wave of the Indonesia Family Life Survey (IFLS-5), we find an inverse relation between parental risk aversion and children’s cognitive test scores. However, the effect of parental risk attitudes is only prominent for daughters.