The Returns To Formal Education In Indonesia

This report provides guidance on how Indonesia can consolidate gains in access to basic education and develop an education system that will support an economy in transition towards high-income status.

In Indonesia, as elsewhere in Asia, education will inevitably play a key role in the national development experience as the twenty-first century unfolds. Not much international attention is paid to how the education sector is faring in Indonesia, but that is not because nothing is happening. The past decade has seen major changes in the structure of the education system and in the schooling trajectories of Indonesian children and adolescents. The administration of primary and secondary education has been decentralized to the regions. A new paradigm of school-based management has been introduced. Public spending on education has finally reached one-fifth of total government spending, as required by law. But although enrolment rates at all levels continue to increase, the quality of education remains low and has not improved, and the tertiary sector continues to experience problems of autonomy and unsatisfactory performance.

What are the current trends and main characteristics of public education spending in Indonesia? Is education spending insufficient? Are expenditures in education efficient and equitable? This study reports the first account of Indonesia's aggregated (national and sub-national) spending on education, as well as the economic composition of education spending and its breakdown by programs. It presents estimations of the expected (average) level of education spending for a country with its economic and social characteristics. This analysis sheds light on the efficiency and equity of education spending by presenting social rates of return by level of education, by assessing the adequacy of current teacher earnings relative to other paid workers and the distribution of teachers across urban, rural, and remote regions, and by identifying the main determinants of education enrollment. It concludes that the current challenges in Indonesia are no longer defined by the need of additional spending, but rather the need to improve the quality of education services, and to improve the efficiency of education expenditures by re-allocating teachers to undersupplied regions and re-adjusting the spending mix within and between education programs for future additional spending in the sector. The study finds that poverty and student-aged labor are also significant constraints to education enrollment, stressing the importance of policies aimed at addressing demand-side factors.

Conference paper on the development of nonformal education in the context of rural development in Indonesia - includes a preliminary project evaluation of a project carried out in two poverty-stricken rural communitys. Diagrams. Conference held in East lansing 1976 September 26 to October 3.

Children involvement in employment has gained many attentions from all over the world. On one hand, it is child’s right to develop themselves through education, adequate nutrition, caring from parents, as well as proper environment for their growth. On the other hand, poverty seems preventing children to have a decent growth. They even have to work in their earlier age not only as an added or substitute worker, but also as a permanent worker to help their family’s economy. Many policies and government intervention has been raised to tackle this phenomenon. However, recent research outcome found that poverty is not solely as a main factor that affects working children present in the family. This study tries to find the correlation between parents’ perception on return to education and parents’ characteristics, namely, parents’ health status, parents’ residence, as well as parents’ presence in the family, on the probability children will work. Using Heckman two-step model to calculate the return to education and probit regression on probability children will work, we found that return to education indeed has significant negative relationship on working children. This implies that an increase in return to education will reduce the probability that children have to work. Moreover, the significant positive relationship with parents’ residence and parents’ health condition proved that if a household experienced a “shock” situation such as parents’ absenteeism in the family or parents’ sickness, will increase the probability that children have to work. After all, combination policies to raise the importance of education as well as the availability of formal insurance are needed.