The Effect of School Operational Assistance Program on Investment in Education by Households: Evidence from Indonesia

Nia Pramita Sari, Ryuichi Tanaka

Abstract

The School Operational Assistance Program, referred to as BOS, is a demand intervention program indirectly provided by the government of Indonesia to students through schools, started in July 2005. This paper examines the impact of BOS on educational investment by households and other expenditure such as food and non-food consumption. Using the observations of 1,161 households with at least one member studying in public school from the fourth wave of the Indonesian Family Life Survey (IFLS 4), we discover that BOS is effective in relaxing household’s budget constraint, thus increasing educational investment by households. We also discover that households with low income benefit significantly from BOS relative to those with high income. Additionally, we discover that BOS assists households, regardless of their income level, in increasing their spending on food and non-food items.

 

Keywords

School Operational Assistance; government program; investment in education

Full Text:

PDF

References

Anand, P, Mizala, A & Repetto, A 2009, ‘Using school scholarships to estimate the effect of private education on the academic achievement of low-income students in Chile’, Economics of Education Review, vol. 28, no. 3, pp.370-381, DOI: https://doi.org/10.1016/j.econedurev.2008.03.005.

Angrist, JD, Bettinger, E, Bloom, E, King, E & Kremer, M 2001, ‘Vouchers for private schooling in Colombia: Evidence from a randomized natural experiment’, NBER Working Paper No. 8343, viewed 4 March 2014, .

Attanasio, O, Fitzsimons, E & Gomez, A 2005, ‘The impact of a conditional education subsidy on school enrollment in Colombia’, IFS Report Summary Familia 01, Institute for Fiscal Studies, viewed 24 August 2014, .

Attanasio, O & Mesnard, A. 2006, ‘The impact of a conditional cash transfer programme on consumption in Colombia’, Fiscal Studies, vol. 27, no. 4, pp. 421-442, DOI: https://doi.org/10.1111/j.1475-5890.2006.00041.x.

Banerjee, AV 2004, ‘Educational policy and the economics of the family’, Journal of Development Economics, vol. 74, no. 1, pp. 3-32, DOI: https://doi.org/10.1016/j.jdeveco.2003.12.002.

Battistin, E, Dearden, L, Emmerson, C, Fitzsimons, E & Meghir, C 2004, ‘The evaluation of education maintenance allowance pilots: Three years’ evidence. A quantitative evaluation’, IFS Report, Institute for Fiscal Studies, viewed 24 August 2014, .

Behrman, JR, Parker, SW & Todd, PE 2005, ‘Long-term impacts of the Oportunidades conditional cash transfer program on rural youth in Mexico’, Discussion Papers No. 122, Ibero-America Institute for Economic Research, viewed 25 June 2015, http://hdl.handle.net/10419/27412.

Behrman, JR, Sengupta, P & Todd, P 2005, ‘Progressing through PROGRESSA: An impact assessment of a school subsidy experiment in rural Mexico’, Economic Development and Cultural Change, vol. 54, no. 1, pp. 237-275, DOI: https://doi.org/10.1086/431263.

Behrman, JR, Parker, SW & Todd, PE 2007, Do school subsidy programs generate lasting benefits? A fiveyear follow-up of Oportunidades participants, viewed 25 June 2015, .

Chevalier, A 2004, ‘Parental education and child’s education:

A natural experiment’, IZA Discussion Paper No. 1153, The Institute for the Study of Labor, viewed 25 June 2015, .

Duflo, E 2001, ‘Schooling and labor market consequences of school construction in Indonesia: Evidence from an unusual policy experiment’, American Economic Review, vol. 91, no. 4, pp. 795-813, DOI: 10.1257/aer.91.4.795.

Frankenberg, E, Smith, JP & Thomas, D 2003, ‘Economic shocks, wealth, and welfare’, The Journal of Human Resources, vol. 38, no. 2, pp. 280-321, DOI: 10.3368/jhr.XXXVIII.2.280.

Glewwe, P & Jacoby, HG 2004, ‘Economic growth and the demand for education: Is there a wealth effect?’, Journal of Development Economics, vol. 74, no. 1, pp. 33-51, DOI: https://doi.org/10.1016/j.jdeveco.2003.12.003.

Glewwe, P & Lambert, S 2010, ‘Education production functions: Evidence from developing countries’, in P Peterson, E Baker & B McGaw (eds), The International Encyclopedia of Education (3rd edition), Elsevier, pp. 412-422, DOI: https://doi.org/10.1016/B978-0-08-044894-7.01232-X.

Khandker, SR, Pitt, MM & Fuwa, N 2003, ‘Subsidy to promote girls’ secondary education: The female stipend program in Bangladesh’, MPRA Paper No. 23688, Munich Personal RePEc Archive, viewed 24 August 2014, .

Kim, J, Alderman, H & Orazem, PF 1999, ‘Can private school subsidies increase enrollment rate for the poor? The Quetta urban fellowship program’, The World Bank Economic Review, vol. 13, no. 3, pp. 443-465, DOI: https://doi.org/10.1093/wber/13.3.443.

Kochar, A 2004, ‘Urban influences on rural schooling in India’, Journal of Development Economics, vol. 74, no. 1, pp. 113-136, DOI:

https://doi.org/10.1016/j.jdeveco.2003.12.006.

Law of the Republic of Indonesia No. 20 of 2003 on National Education System, viewed 2 December 2014, . [19] Lucas Jr, RE 1988, ‘On the mechanics of economic development’, Journal of Monetary Economics, vol. 22, no.1, pp. 3-42, DOI: https://doi.org/10.1016/0304-3932(88)90168-7.

Miles, D 1997, ‘A household level study of the determinants of incomes and consumption’, The Economic Journal, vol. 107, no. 440, pp. 1-25, DOI: https://doi.org/10.1111/1468-0297.00139.

Oseni, G, Huebler, F, McGee, K, Amankwah, A, Legault, E & Rakotonarivo, A 2018, Measuring household expenditure on education: A Guidebook for designing household survey questionnaires, LSMS Gueidebook, viewed 23 December 2019, .

Romer, PM 1986, ‘Increasing returns and long-run growth’, Journal of Political Economy, vol. 94, no. 5, pp. 1002-1037, DOI: https://doi.org/10.1086/261420.

Schultz, TW 1961, ’Investment in human capital’, The American Economic Review, vol. 51, no. 1, pp. 1-17.

SMERU 2006, ‘The implementation of the school operational assistance (BOS) program 2005’, SMERU News No. 19: Jul-Sep/2006, viewed 24 August 2014, .

Sparrow, R 2007, ‘Protecting education for the poor in times of crisis: An evaluation of a scholarship program in Indonesia’, Oxford Bulletin of Economic and Statistics, vol. 69, no. 1, pp. 99-122, DOI: https://doi.org/10.1111/j.1468-0084.2006.00438.x.

Stock, JH & Watson, MW 2012, Introduction to econometrics, 3rd edn, Pearson Education Limited, England.

Suharyo, WI, Rahayu, SK, Widyanti, W & Arif, S 2009, ‘Social protection programs for poverty reduction in Indonesia (1999-2005)’, Draft SMERU Research Report, viewed 25 June 2015, .

Verbeek, M 2012, A guide to modern econometrics, 4th edn, Wiley, New York.

Weiss, Y, Hall, A & Dong, F 1980, ‘The effect of price and income in investment in schooling’, The Journal of Human Resources, vol. 15, no.4, pp. 611-640, DOI: 10.2307/145404.

Wu, T 2013, ‘Constraints to human capital investment in developing countries: Using the Asian financial crisis in Indonesia as a natural experiment’, Bulletin of Indonesian Economic Studies, vol. 49, no. 1, pp. 113-114, DOI: https://doi.org/10.1080/00074918.2013.779772.

Refbacks

  • There are currently no refbacks.