Behind the Inequality of School Progression in Indonesia

This paper examines school progression in Indonesia using merged data from national socio-economic survey from 1993 to 2009 with administrative data on education finance at district level and data from national labor force survey. At the first stage, the data from socio-economic surveys are analysed using survival models revealing an overtime improvement in school progression. However, the analysis from the most recent data finds that there are many children still could not complete Nine-Year Basic Education, although it is compulsory. Drop-out rate at both primary and junior secondary school remains an issue, but low transition rate is even more challenging. Based on this finding, this study runs multilevel analyses to examine the likelihood of a child to continue their education to the next level after completing primary or junior secondary schools. It reveals that inequality in school continuation does vary across districts. Gender and household wealth effects are found to vary across districts. Education budget allocated by district government together with gender development at district level to some extent are positively associated with school continuation, but the findings provide strong evidence that socio-economic of households is the most important factor for children to progress their education.