The Value of Vocational Education: High School Type and Labor Market Outcomes in Indonesia

42 Pages Posted: 20 Apr 2016

See all articles by David Locke Newhouse

David Locke Newhouse

World Bank

Daniel Suryadarma

Australian National University (ANU) - Arndt-Corden Department of Economics; SMERU Research Institute

Date Written: September 1, 2009

Abstract

This paper examines the relationship between the type of senior high school attended by Indonesian youth and their subsequent labor market outcomes. This topic is very timely, given the government's recent decision to dramatically expand vocational enrollment. The analysis controls for an unusually rich set of predetermined characteristics, and exploits longitudinal data spanning 14 years to separately identify cohort and age effects. There are four main findings. First, students are sorted into different school types largely on the basis of their entering exam score. Public schools attract the highest-scoring students, while private vocational schools serve the lowest-scoring students. Second, after controlling for a variety of characteristics, including test scores, male public school graduates earn a substantial premium over their privately schooled counterparts. Third, private vocational school graduates fare at least as well as private general graduates, despite coming from more disadvantaged socioeconomic backgrounds. Finally, the returns to public vocational education have declined sharply for the most recent cohort of men. This raises important concerns about the current expansion of public vocational education, and the relevance of the male vocational curriculum in an increasingly service-oriented economy.

Keywords: Tertiary Education, Secondary Education, Education For All, Labor Markets, Teaching and Learning

Suggested Citation

Newhouse, David Locke and Suryadarma, Daniel, The Value of Vocational Education: High School Type and Labor Market Outcomes in Indonesia (September 1, 2009). World Bank Policy Research Working Paper No. 5035, Available at SSRN: https://ssrn.com/abstract=1471133

David Locke Newhouse (Contact Author)

World Bank ( email )

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Washington, DC 20433
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Daniel Suryadarma

Australian National University (ANU) - Arndt-Corden Department of Economics ( email )

ANU College of Asia and the Pacific
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Canberra, Australian Capital Territory 0200
Australia

SMERU Research Institute ( email )

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