Access to Clean Water and Human Capital Formation – Evidence from Indonesia

We estimate the causal effect of access to clean water sources on educational outcomes in Indonesia. Using the longitudinal Indonesian Family Life Survey (IFLS) panel dataset, which follows the same individuals from 1993 to 2014, and applying household fixed effects allows us to identify the causal effect of access to clean water at different childhood stages on children’s educational performance. We find that lifetime and early childhood access increases strongly the likelihood of completing junior and senior secondary school; later-gained access has no discernible effect on school performance. Our results underscore the need to provide access to clean water very early on.