Investing in Indonesia’s Education: Allocation, Equity, and Efficiency of Public Expenditures

Francisco Arze del Granado (), Wolfgang Fengler, Andrew Ragatz and Elif Yavuz

MPRA Paper from University Library of Munich, Germany

Abstract: What is the current level and main characteristics of public education spending in Indonesia? Is education spending insufficient? Is education spending efficient and equitable? This study reports the first account of Indonesia’s aggregated (national and sub-national) spending on education, as well as the economic and sub-functional (by programs) composition of education expenditures. It presents estimations of the expected (average) level of education spending for a country with similar economic and social characteristics. It sheds light on efficiency and equity of education spending by presenting social rates of return by level of education, an assessment of the adequacy of current teacher earnings relative to other paid workers, the distribution of teachers across urban, rural, and remote regions, and the determinants of education enrollment. It concludes that the current challenges in Indonesia are not anymore defined by the need to increase spending on the supply side, but rather to improve the quality of education services, and to improve the efficiency of education expenditures by re-allocating teachers to undersupplied regions and re-adjusting the spending mix within and between education programs of future additional spending in the sector. The study finds that poverty and student-aged labor are also significant constraints to education enrollment, stressing the importance of policies aimed to address demand-side factors affecting education access in Indonesia.

Keywords: education Indonesia; expenditures education Indonesia; Indonesia's education; quality education; efficiency of education expenditures; equity of education expenditures; rates of return; teacher wages indonesia; education 20% rule Indonesia (search for similar items in EconPapers)
JEL-codes: H41 I22 I28 (search for similar items in EconPapers)
Date: 2007-07
New Economics Papers: this item is included in nep-dev, nep-edu, nep-hrm and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11) Track citations by RSS feed

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Related works:
Working Paper: Investing in Indonesia's education: allocation, equity, and efficiency of public expenditures (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:4372

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