AbstractsEducation Research & Administration

There is an urgent need for upper secondary-level and above educated people in Indonesia. According to a recent report, Indonesian companies cannot fill 50% of their entry level positions. To increase the educational attainment, government has been implementing various polices, such as school construction program, compulsory education and allocating 20% of its budget to education, but inadequate enrollment at upper secondary and tertiary levels and the quality of education still remain as big problems. To shed a light on these urgent and recent problems, I ask four questions: a) What is the effect of school quality on tertiary attainment? b) Which school level does the quality matter more? c) Which factors prevent high ability individuals to get tertiary attainment? d) How important is parental background for educational attainment at each stage of the educational path? Previous work focused on school quality’s effect on lower secondary education, and a lack of upper secondary-level and above educated people is an issue only brought up recently and analyzed in this paper. I show that primary school quality has a direct effect on tertiary attainment besides its indirect effect due to the accumulation of school quality at each level. To generate my dataset, I use four waves of Indonesia Family Life Survey. My model accounts for unobserved heterogeneity to handle self selection issues in education. This is one of the few studies in a developing country modeling long term educational decisions. I analyze the role of family background, location, personal characteristics, number of schools used in each community, primary school quality, as well as student’s ability and motivation for transitions to lower secondary, upper secondary, and tertiary education in Indonesia. With a focus on tertiary educational attainment, I show that long term factors and early fundamental education play a big role. These findings further support the importance of promoting cognitive ability and high quality education early in life; especially for those who are coming from more disadvantaged environments.