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The value of vocational education : high school type and labor market outcomes in Indonesia

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  • Newhouse, David
  • Suryadarma, Daniel

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 very timely, given the government’s recent decision to dramatically expand vocational enrollment. The analysis controls for an unusually rich set of predetermined characteristics, and exploits longitudinal data spanning 14 years to separately identify cohort and age effects. There are four main findings. First, students are sorted into different school types largely on the basis of their entering exam score. Public schools attract the highest-scoring students, while private vocational schools serve the lowest-scoring students. Second, after controlling for a variety of characteristics, including test scores, male public school graduates earn a substantial premium over their privately schooled counterparts. Third, private vocational school graduates fare at least as well as private general graduates, despite coming from more disadvantaged socioeconomic backgrounds. Finally, the returns to public vocational education have declined sharply for the most recent cohort of men. This raises important concerns about the current expansion of public vocational education, and the relevance of the male vocational curriculum in an increasingly service-oriented economy.

Suggested Citation

  • Newhouse, David & Suryadarma, Daniel, 2009. "The value of vocational education : high school type and labor market outcomes in Indonesia," Policy Research Working Paper Series 5035, The World Bank.
  • Handle: RePEc:wbk:wbrwps:5035
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    References listed on IDEAS

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    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. 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.
    6. 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.
    7. World Bank, 2014. "Indonesia - Avoiding the Trap : Development Policy Review 2014," World Bank Other Operational Studies 19326, The World Bank.
    8. 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.
    9. World Bank, 2014. "Indonesia : Avoiding the Trap," World Bank Other Operational Studies 18944, The World Bank.
    10. 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.
    11. World Bank, 2010. "Education, Training and Labor Market Outcomes for Youth in Indonesia," World Bank Other Operational Studies 2914, The World Bank.
    12. Cho, Yoonyoung & Kalomba, Davie & Mobarak, Ahmed Mushfiq & Orozco, Victor, 2013. "Gender differences in the effects of vocational training : constraints on women and drop-out behavior," Policy Research Working Paper Series 6545, The World Bank.
    13. 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.
    14. 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.
    15. World Bank, 2014. "Tertiary Education in Indonesia : Directions for Policy," World Bank Other Operational Studies 20024, The World Bank.
    16. 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.
    17. 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.
    18. 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).

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    Keywords

    Tertiary Education; Secondary Education; Education For All; Labor Markets; Teaching and Learning;

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