<![CDATA[Purpose — This study examines the determinants of cognitive abilities among school-age children in Indonesia and their effects on subsequent educational attainment and labor market outcomes. Methods — The study uses longitudinal data from the Indonesian Family Life Survey (IFLS) for 2000 and 2014. Ordinary Least Squares (OLS) is employed to identify the determinants of cognitive abilities, while Instrumental Variable–Two-Stage Least Squares (IV-2SLS) is used to estimate their effects on education and wages. Findings — Children’s cognitive abilities are influenced by parental education, parental psychological health, residential location, educational expenditure, and birth order. Higher childhood cognitive scores are associated with greater educational attainment and higher wages later in life. Implications — Policies aimed at improving children’s cognitive development should strengthen family socioeconomic conditions, parental well-being, educational investment, and support for children in disadvantaged areas. Originality — This study provides longitudinal evidence from Indonesia linking childhood cognitive abilities with later educational and labor market outcomes. It also applies an IV-2SLS approach to address potential endogeneity and produce more robust estimates.]]>
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