Assimilation Through Education: The Direct and Spillover Effects of Indonesia’s Abolishment of Chinese Education

This paper examines the impact of an education policy in Indonesia intended to promote the assimilation of ethnic Chinese minorities into the broader society. The policy involved the closure of Chinese-medium schools and the imposition of Indonesian as the language of instruction, alongside a standardised national curriculum for Chinese students. Using a difference-in-differences approach that exploits variation in the presence of Chinese schools across districts and difference in policy exposure across birth cohorts, I assess both the policy’s direct effect on Chinese students and its spillover effects on non-Chinese students. The results show that the policy disrupted the educational trajectories of Chinese students who were already enrolled in school at the time of implementation, though it had no significant impact on their subsequent labor market outcomes. The policy did, however, coincide with a widespread linguistic shift toward the use of the national language among Chinese individuals, although this does not differ across location. The policy’s impact on linguistic switch only becomes substantial for cohorts fully subjected to Indonesian education. Despite signs of linguistic assimilation, inter-ethnic marriage rates declined in districts that underwent forced educational transitions. Among non-Chinese individuals, the policy had mixed spillover effects: educational outcomes became more polarised, while labor market outcomes showed improvement.