Effects of a Sibship Extension to Foster Children on Children's School Enrolment: A Sibling Rivalry Analysis for Indonesia

In this paper, we question whether and how the sibship extension to foster children, a common practice in many developing countries, affects children's school enrolment status. Based on Indonesian data, we show that children's school enrolment increases with the number of foster grandchildren in their sibship. Given that grandchildren fostering is associated with positive transfers from biological to host parents, this result reflects either a release of liquidity constraints in the host household or the uncommon preferences of host grandparents. Conversely, the proportion of other foster children in a sibship does not have any effect. The latter result's explanation depends on the reason children other than grandchildren are fostered.