Do Supply-Side Education Programmes Work? The Impact of Increased School Supply on Schooling and Wages in Indonesia Revisited
University of Sussex Economics Department Working Paper No. 49-2012
41 Pages Posted: 12 Dec 2012
Date Written: January 17, 2012
Abstract
Indonesia each year allocates a large proportion of its total public spending to education and it is important to understand whether different groups, for instance, children from less advantageous socioeconomic backgrounds or girls benefit differentially from these public investments. It is also desirable to comprehend whether schooling translates into increases in wages that are similar in size for both for men and for women who obtain additional schooling. This paper uses the large-scale Presidential Instruction Primary School construction programme (SD INPRES) rolled out in Indonesia in the 1970s to examine the effect of increased school supply on schooling attainment: overall, by gender, and by socioeconomic background. It also constructs a new SD INPRES programme exposure variable that is used as an instrument for schooling to assess the causal effect of schooling on wages and whether the additional schooling induced by the programme had differential impacts for men and women. To preview the findings, SD INPRES programme exposure significantly increased schooling both for men and for women. Moreover, women benefitted more from the SD INPRES programme than men and so did individuals from less advantageous socioeconomic backgrounds contributing to a narrowing of schooling gaps by gender and by socioeconomic background. In addition, more schooling is found to cause higher wages for men and women and there appears to be an additional positive effect on wages for women through the additional schooling induced by the SD INPRES programme.
Keywords: wages, schooling, education, labor, Indonesia, education policy
JEL Classification: O12, J00, J31, I2, I25, I28
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Identification and Estimation of Local Average Treatment Effects
By Joshua D. Angrist and Guido W. Imbens
-
Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems
By David Card
-
By James J. Heckman, Lance Lochner, ...
-
Life Cycle Schooling and Dynamic Selection Bias: Models and Evidence for Five Cohorts
-
By James J. Heckman and Edward Vytlacil
-
Earnings, Schooling, and Ability Revisited
By David Card