Alumni profile

Treena Wu

Thesis: Human Capital Investment in Developing Countries: Using the Asian Financial Crisis in Indonesia as a Natural Experiment, 2011

Promotor(s): Lex Borghans

I am interested in the design of social protection policy in South East Asian countries. Given the relative levels of economic growth in this region, a basic social protection package is possible e.g. universal primary school education, basic health care, etc.

Existing social protection programs in the region do not react well to exogenous shocks given the high degree of trade openness of these countries. An example of an aggregate shock was the 1997 Asian Financial Crisis (AFC). The literature has been focused on how relatively quickly the affected economies rebounded at the macroeconomic level. But it has been quite silent in terms of whether there are long term consequences at the household level. If yes, what are these consequences? Hence my current research is concerned with the effects of an aggregate income shock in the household; this is specifically related to human capital investment outcomes. The conceptual framework is guided by 1) Becker’s Treatise on the Family (1991, updated), Human Capital Theory (1993) and 2) Heckman’s Human Capital Policy (2003) and Technology of Skill Formation (2007). Using the AFC as a natural experiment and the RAND Corporation Indonesian Family Life Surveys, I am carrying out a causal analysis of family income and child development.

The research findings can be used in social protection design that is more sensitive to all types of aggregate shocks e.g. economic crises, natural disasters, conflicts, wars, etc. Stabilization by the state shouldn’t require too many trade-offs with the welfare of its citizenry. To complement my research, I carry out evaluations for foreign aid donor programs and area specific fieldwork in South East Asia.

Selected publications by Treena Wu