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Educational Assistance and Education Quality in Indonesia: The Role of Decentralization
Author(s) -
Sari Virgi A.
Publication year - 2019
Publication title -
population and development review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.836
H-Index - 96
eISSN - 1728-4457
pISSN - 0098-7921
DOI - 10.1111/padr.12272
Subject(s) - human capital , economics , earnings , quality (philosophy) , labour economics , productivity , developing country , education economics , inequality , decentralization , economic growth , education policy , business , higher education , finance , market economy , philosophy , epistemology , mathematical analysis , mathematics
We examine the evolution of educational assistance in Indonesia, following two decades of government decentralization, and its effect on education quality. Using Indonesia Family Life Survey data, we exploit as exogenous rule the variation in the implementation of government decentralization to compute difference-in-difference estimators. Indicative evidence suggests decentralization has facilitated collusion between village authorities and marginalized private schools, with substantial increases in educational assistance and financial resources, especially to religious schools. Despite dominant rent-seeking behaviour and self-interest motives, increased public resource allocation to private schools impacted positively on student achievement. Our results also emphasize the role of social norms in undermining efficient public goods allocation after decentralization.