The Return to Education in Indonesia

higher education in indonesia

The Indonesian Government has faced strong political opposition to market-oriented education reform. It has also faced fierce resistance from old system profiteers. While some elements of the society are interested in the accumulation of resources and political control, others have little interest in improving the quality of education.

A fundamental shift in social and political relationships is necessary for a high-quality education system in Indonesia. Inadequate funding and perverse incentive structures have contributed to poor educational performance. There is also a lack of institutional autonomy and managerial responsibility for improved learning outcomes.

Several studies have looked at the rate of return to education in Indonesia. One method is the Mincer earnings equation, which estimates the earnings gap of college graduates. Another technique, the full discounting method, assesses the value of higher education based on NPV analysis.

Both methods have been used in other countries to measure the return to education. But they are risky because it is difficult to accurately predict income and unemployment. Therefore, Indonesian governments should focus on policies that ensure every citizen can access state services. This includes public spending, which should focus on justice aspects, such as accessibility.

Higher education is expensive and requires sacrifices. Indonesian students need to spend three years to get a bachelor’s degree and two years for a master’s degree. After that, they can pursue doctoral degrees. However, the demand for higher education in Indonesia is increasing.

Since the fall of the New Order, progressive NGOs have been involved in education policymaking. Their role was strengthened by the fact that the new democratic government empowered public actors. Yet, these actors were stymied by the continuing dominance of the elites in the education bureaucracy.


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