IDEAS home Printed from https://ideas.repec.org/p/unp/wpaper/200914.html
   My bibliography  Save this paper

School Choice and Earnings: A Case of Indonesia

Author

Listed:
  • Mohamad Fahmi

    () (Department of Economics, Padjadjaran University)

Abstract

Public schools in Indonesia are widely perceived have better inputs and to be superior to private schools. Public schools also benefit advantages of high-scoring peer effect as entry to some junior secondary public schools in urban area is based on national score test in elementary school. In this paper, I attempt to confirm the perception of superiority of public school in Indonesia by comparing the yearly earnings of four types of schools group; Public, Private Secular, Private Islam, and Private Christian. I use a large-scale longitudinal observation of individual and household level on socioeconomic and health survey, Indonesia Family Life Survey (IFLS) 2000 to estimate the effectiveness junior secondary education in Indonesia. To correct for sample selection bias, I use the two-step method proposed by Bourguignon et al. As a result of insignificant all selectivity bias coefficients, I use the OLS estimation to calculate the earnings decompositions. The insignificant selection bias coefficients suggest that the OLS estimation is unbiased. I use the Blinder-Oaxaca decomposition with Reimers’ decomposition technique to estimate earning differential between public and three types of private school graduates. The results of earnings decomposition from OLS estimation, suggest that earning of people who graduate from public school are 25 per cent and 35.2 per cent higher than their counterparts from private nonreligious and private Islam. On the other hand, student who schooled at private Christian school enjoys 0.28 per cents higher earnings that public.

Suggested Citation

  • Mohamad Fahmi, 2009. "School Choice and Earnings: A Case of Indonesia," Working Papers in Economics and Development Studies (WoPEDS) 200914, Department of Economics, Padjadjaran University, revised Sep 2009.
  • Handle: RePEc:unp:wpaper:200914
    as

    Download full text from publisher

    File URL: http://ceds.feb.unpad.ac.id/wopeds/200914.pdf
    File Function: First version, 2009
    Download Restriction: no

    References listed on IDEAS

    as
    1. Jimenez, Emmanuel & Lockheed, Marlaine E & Paqueo, Vicente, 1991. "The Relative Efficiency of Private and Public Schools in Developing Countries," World Bank Research Observer, World Bank Group, vol. 6(2), pages 205-218, July.
    2. Anh T. Le & Paul W. Miller, 2003. "Choice of School in Australia: Determinants and Consequences," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 36(1), pages 55-78.
    3. Meer, Jonathan, 2007. "Evidence on the returns to secondary vocational education," Economics of Education Review, Elsevier, vol. 26(5), pages 559-573, October.
    4. Wayne Strayer, 2002. "The Returns to School Quality: College Choice and Earnings," Journal of Labor Economics, University of Chicago Press, vol. 20(3), pages 475-503, July.
    5. Ben Jann, 2008. "A Stata implementation of the Blinder-Oaxaca decomposition," ETH Zurich Sociology Working Papers 5, ETH Zurich, Chair of Sociology, revised 14 May 2008.
    6. Samer Al-Samarrai & Barry Reilly, 2008. "Education, Employment and Earnings of Secondary School and University Leavers in Tanzania: Evidence from a Tracer Study," Journal of Development Studies, Taylor & Francis Journals, vol. 44(2), pages 258-288.
    7. 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).
    8. Neal, Derek, 1997. "The Effects of Catholic Secondary Schooling on Educational Achievement," Journal of Labor Economics, University of Chicago Press, vol. 15(1), pages 98-123, January.
    9. Christian Dustmann, 2004. "Parental background, secondary school track choice, and wages," Oxford Economic Papers, Oxford University Press, vol. 56(2), pages 209-230, April.
    10. Reimers, Cordelia W, 1983. "Labor Market Discrimination against Hispanic and Black Men," The Review of Economics and Statistics, MIT Press, vol. 65(4), pages 570-579, November.
    11. François Bourguignon & Martin Fournier & Marc Gurgand, 2007. "Selection Bias Corrections Based On The Multinomial Logit Model: Monte Carlo Comparisons," Journal of Economic Surveys, Wiley Blackwell, vol. 21(1), pages 174-205, February.
    12. Betts, Julian R, 1995. "Does School Quality Matter? Evidence from the National Longitudinal Survey of Youth," The Review of Economics and Statistics, MIT Press, vol. 77(2), pages 231-250, May.
    13. Ben Jann, 2004. "DECOMPOSE: Stata module to compute decompositions of wage differentials," Statistical Software Components S4444103, Boston College Department of Economics, revised 12 May 2005.
    14. Jacob Mincer, 1958. "Investment in Human Capital and Personal Income Distribution," Journal of Political Economy, University of Chicago Press, vol. 66, pages 281-281.
    15. Bedi, Arjun S. & Garg, Ashish, 2000. "The effectiveness of private versus public schools: the case of Indonesia," Journal of Development Economics, Elsevier, vol. 61(2), pages 463-494, April.
    16. Paul Glewwe & Hanan Jacoby, 1994. "Student Achievement and Schooling Choice in Low-Income Countries: Evidence from Ghana," Journal of Human Resources, University of Wisconsin Press, vol. 29(3), pages 843-864.
    17. Niaz Asadullah, Mohammad & Chaudhury, Nazmul & Dar, Amit, 2007. "Student achievement conditioned upon school selection: Religious and secular secondary school quality in Bangladesh," Economics of Education Review, Elsevier, vol. 26(6), pages 648-659, December.
    18. William N. Evans & Robert M. Schwab, 1995. "Finishing High School and Starting College: Do Catholic Schools Make a Difference?," The Quarterly Journal of Economics, Oxford University Press, vol. 110(4), pages 941-974.
    19. Patrick McEwan, 2001. "The Effectiveness of Public, Catholic, and Non-Religious Private Schools in Chile's Voucher System," Education Economics, Taylor & Francis Journals, vol. 9(2), pages 103-128.
    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. Mohamad Fahmi & Achmad Maulana & Ariek A. Yusuf, 2013. "Complementary Policies to Increase Poor People’s Access to Higher Education: the Case of West Java, Indonesia," Working Papers 2013/23, Maastricht School of Management.
    2. Stern, Jonathan M.B. & Smith, Thomas M., 2016. "Private secondary schools in Indonesia: What is driving the demand?," International Journal of Educational Development, Elsevier, vol. 46(C), pages 1-11.

    More about this item

    Keywords

    Parent choice; Education; School effectiveness; earnings; Indonesia;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:unp:wpaper:200914. 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: (Arief Anshory Yusuf). General contact details of provider: http://edirc.repec.org/data/lppadid.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.