Investing in Indonesia's education : allocation, equity, and efficiency of public expenditures
AbstractWhat 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.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 4329.
Date of creation: 01 Aug 2007
Date of revision:
Education For All; Primary Education; Tertiary Education; Teaching and Learning;
Other versions of this item:
- Arze del Granado, Javier & Fengler, Wolfgang & Ragatz, Andrew & Yavuz, Elif, 2007. "Investing in Indonesia’s Education: Allocation, Equity, and Efficiency of Public Expenditures," MPRA Paper 4372, University Library of Munich, Germany.
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
- I28 - Health, Education, and Welfare - - Education - - - Government Policy
- I22 - Health, Education, and Welfare - - Education - - - Educational Finance
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-09-09 (All new papers)
- NEP-EDU-2007-09-09 (Education)
- NEP-HRM-2007-09-09 (Human Capital & Human Resource Management)
- NEP-LAB-2007-09-09 (Labour Economics)
- NEP-SEA-2007-09-09 (South East Asia)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- World Bank, 2006. "Making the New Indonesia Work for the Poor," World Bank Other Operational Studies 8172, The World Bank.
- F. Javier Arze del Granado & Jorge Martinez-Vazquez & Robert McNab, 2005. "Fiscal Decentralization and The Functional Composition of Public Expenditures," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0501, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
- McMahon, Walter W. & Boediono, Walter W., 1992. "Universal basic education: An overall strategy of investment priorities for economic growth," Economics of Education Review, Elsevier, vol. 11(2), pages 137-151, June.
- Tobing, Elwin, 2011. "Taxation, human capital formation, and long-run growth with private investment in education," Journal of Asian Economics, Elsevier, vol. 22(1), pages 48-60, February.
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