IDEAS home Printed from https://ideas.repec.org/a/oup/wbecrv/v25y2011i2p296-322.html
   My bibliography  Save this article

The Value of Vocational Education: High School Type and Labor Market Outcomes in Indonesia

Author

Listed:
  • David Newhouse
  • Daniel Suryadarma

Abstract

This paper examines the relationship between the type of senior high school attended by Indonesian youth and their subsequent labor market outcomes. This topic is timely in light of a recent policy shift that aims to dramatically expand vocational education. The analysis controls for an unusually rich set of predetermined characteristics, and exploits longitudinal data spanning fourteen years to separately identify cohort and age effects. There are four main findings. First, the estimated wage premium for vocational graduates, relative to general graduates, is greater for women than men. Second, the returns to public vocational school for men have plummeted for the most recent cohort, and male vocational graduates now face a large wage penalty. Third, the generally favorable outcomes of public school graduates can be partly explained by non-random sorting of students with higher test scores and better-educated parents into public schools. Finally, these peer effects appear to be particularly important for students with above-average test scores, as men with high scores earn a surprisingly small premium from graduating from vocational or private general school. These small returns for high-scoring men, as well as the dramatic fall in the earnings premium for all male vocational graduates, raise important concerns about the current expansion of public vocational education and the relevance of the male vocational curriculum in an increasingly service-oriented economy. Copyright , Oxford University Press.

Suggested Citation

  • David Newhouse & Daniel Suryadarma, 2011. "The Value of Vocational Education: High School Type and Labor Market Outcomes in Indonesia," World Bank Economic Review, World Bank Group, vol. 25(2), pages 296-322, May.
  • Handle: RePEc:oup:wbecrv:v:25:y:2011:i:2:p:296-322
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/wber/lhr010
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Kahyarara, Godius & Teal, Francis, 2008. "The Returns to Vocational Training and Academic Education: Evidence from Tanzania," World Development, Elsevier, vol. 36(11), pages 2223-2242, November.
    2. Esther Duflo, 2001. "Schooling and Labor Market Consequences of School Construction in Indonesia: Evidence from an Unusual Policy Experiment," American Economic Review, American Economic Association, vol. 91(4), pages 795-813, September.
    3. David Newhouse & Kathleen Beegle, 2006. "The Effect of School Type on Academic Achievement: Evidence from Indonesia," Journal of Human Resources, University of Wisconsin Press, vol. 41(3).
    4. Michael Lechner, 2000. "An Evaluation of Public-Sector-Sponsored Continuous Vocational Training Programs in East Germany," Journal of Human Resources, University of Wisconsin Press, vol. 35(2), pages 347-375.
    5. Ofer Malamud & Cristian Pop-Eleches, 2008. "General Education vs. Vocational Training: Evidence from an Economy in Transition," NBER Working Papers 14155, National Bureau of Economic Research, Inc.
    6. James Heckman & Edward Vytlacil, 2001. "Identifying The Role Of Cognitive Ability In Explaining The Level Of And Change In The Return To Schooling," The Review of Economics and Statistics, MIT Press, vol. 83(1), pages 1-12, February.
    7. Guido W. Imbens & Jeffrey M. Wooldridge, 2009. "Recent Developments in the Econometrics of Program Evaluation," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 5-86, March.
    8. Francis Teal & Godius Kahyarara, 2008. "The returns to vocational training and academic education: Evidence from Tanzania," Economics Series Working Papers WPS/2008-07, University of Oxford, Department of Economics.
    9. Neuman, Shoshana & Ziderman, Adrian, 1991. "Vocational schooling, occupational matching, and labor market earnings in Israel," Policy Research Working Paper Series 683, The World Bank.
    10. Moenjak, Thammarak & Worswick, Christopher, 2003. "Vocational education in Thailand: a study of choice and returns," Economics of Education Review, Elsevier, vol. 22(1), pages 99-107, February.
    11. Tobias, J.L., 2000. "Are Return to Schooling Concentrated Among the Most Able? A Semiparametric Analysis of the Ability-Earnings Relationship," Papers 00-01-12, California Irvine - School of Social Sciences.
    12. Paul Bennell, 1996. "General versus vocational secondary education in developing countries: A review of the rates of return evidence," Journal of Development Studies, Taylor & Francis Journals, vol. 33(2), pages 230-247.
    13. Shoshana Neuman & Adrian Ziderman, 1991. "Vocational Schooling, Occupational Matching, and Labor Market Earnings in Israel," Journal of Human Resources, University of Wisconsin Press, vol. 26(2), pages 256-281.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sergio, Urzúa, 2012. "La rentabilidad de la educación superior en Chile: revisión de las bases de 30 años de políticas públicas," Estudios Públicos, Centro de Estudios Públicos, vol. 0(125), pages 2-52.
    2. Monazza Aslam & Shenila Rawal, 2013. "Preparing Women of Substance? Education, Training, and Labor Market Outcomes for Women in Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 18(Special E), pages 93-128, September.
    3. Todd Pugatch, 2014. "Safety valve or sinkhole? Vocational schooling in South Africa," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-31, December.
    4. Dosmagambet, Yergali, 2015. "Optimal policy for secondary education in developing countries," PFH Forschungspapiere/Research Papers 2015/01, PFH Private University of Applied Sciences, Göttingen.
    5. Cho, Yoon Y. & Kalomba, Davie & Mobarak, A. Mushfiq & Orozco, Victor, 2013. "Gender Differences in the Effects of Vocational Training: Constraints on Women and Drop-Out Behavior," IZA Discussion Papers 7408, Institute for the Study of Labor (IZA).
    6. Assaad, Ragui & Krafft, Caroline, 2015. "Is free basic education in Egypt a reality or a myth?," International Journal of Educational Development, Elsevier, vol. 45(C), pages 16-30.
    7. World Bank, 2014. "Tertiary Education in Indonesia : Directions for Policy," World Bank Other Operational Studies 20024, The World Bank.
    8. Prashant Loyalka & Xiaoting Huang & Linxiu Zhang & Jianguo Wei & Hongmei Yi & Yingquan Song & Yaojiang Shi & James Chu, 2016. "The Impact of Vocational Schooling on Human Capital Development in Developing Countries: Evidence from China," World Bank Economic Review, World Bank Group, vol. 30(1), pages 143-170.
    9. Cho, Yoonyoung. & Kalomba, Davie. & Mobarak, Ahmed Mushfiq. & Orozco, Victor., 2015. "Differences in the effects of vocational training on men and women : constraints on women and drop-out behaviour," ILO Working Papers 994874103402676, International Labour Organization.
    10. World Bank, 2014. "Indonesia - Avoiding the Trap : Development Policy Review 2014," World Bank Other Operational Studies 19326, The World Bank.
    11. Dyah Larasati & Fiona Howell, 2014. "El Programa Indonesio de Transferencias Monetarias a los Estudiantes Pobres: Bantuan Siswa Miskin (BSM)," Policy Research Brief 46, International Policy Centre for Inclusive Growth.
    12. World Bank, 2014. "Indonesia : Avoiding the Trap," World Bank Other Operational Studies 18944, The World Bank.
    13. Ian Coxhead & Rashesh Shrestha, 2016. "Could a Resource Export Boom Reduce Workers’ Earnings? The Labour-Market Channel in Indonesia," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 52(2), pages 185-208, May.
    14. Joshua Aizenman & Yothin Jinjarak & Nam Ngo & Ilan Noy, 2017. "Vocational Education, Manufacturing, and Income Distribution: International Evidence and Case Studies," NBER Working Papers 23950, National Bureau of Economic Research, Inc.
    15. Bai, Yunli & Zhang, Linxiu & Yi, Hongmei & Zheng, Liming & Rozelle, Scott, 2017. "The Impact of an Academic High School Tuition Relief Program on Students’ Matriculation into High Schools in Rural China," China Economic Review, Elsevier, vol. 43(C), pages 16-28.
    16. Eichhorst, Werner & Rodríguez-Planas, Núria & Schmidl, Ricarda & Zimmermann, Klaus F., 2012. "A Roadmap to Vocational Education and Training Systems Around the World," IZA Discussion Papers 7110, Institute for the Study of Labor (IZA).
    17. World Bank, 2010. "Education, Training and Labor Market Outcomes for Youth in Indonesia," World Bank Other Operational Studies 2914, The World Bank.
    18. Alonso, Bucarey & Sergio, Urzúa, 2013. "El retorno económico de la educación media técnico profesional en Chile," Estudios Públicos, Centro de Estudios Públicos, vol. 0(129), pages 1-48.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:wbecrv:v:25:y:2011:i:2:p:296-322. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press) or (Christopher F. Baum). General contact details of provider: http://edirc.repec.org/data/wrldbus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.