The Impact of poverty and educational policy on child labor in Indonesia

TRININGSIH, Nina, Prof. Masaru ICHIHASHI

2010 | Tesis | S2 Magister Ekonomika Pembangunan

Eradicating extreme poverty and hunger, and also achieving universal primary education are two goals of Millennium Development Goals (MDGs). In the year 2005, Indonesia had implemented two kinds of policy regarding poverty alleviation (Direct Cash Transfer Program) and education program (School Operational Assistance/Bantuan Operasional Sekolah: BOS) in which the budget is from the reduction on fuel subsidy. This study focuses on analyzing the relationship between the Direct Cash Transfer Program and BOS Program on reduction child labor in Indonesia. Besides this objective, this study also aims to find out the determinant of child labor in Indonesia such as child’s characteristics (age, gender), parents characteristics (level of education, income, residence, etc), and household characteristics. Utilizing the data from Indonesian Family Life Survey (IFLS) 2007 that conducted by RAND, Universitas Gadjah Mada and Survey METRE, this study will use econometric analysis (Probit and Logit model) as a methodology. From the empirical results, this study concludes that because of the poor condition of household, parent send their children to work to get additional income. The result also shows that children are most likely to work in farming field, and this finding is strengthening the wealth paradox between child labor and farm land ownership. Education level plays a crucial role among parents in deciding whether send their children to labor market or not. In case of educational policy (BOS Program), BOS fund gives negative relationship with child labor especially in rural areas. This implies that one way to reduce child labor is by giving some subsidy (fund) in education, therefore children will more likely to go to school, in other word will rise the school enrolment of children. Unfortunately, even though Direct Cash Transfer Program will give additional income to parent, this program is insignificant and ineffective to reduce the incidence of child labor. This phenomenon might be because this program was just temporary subsidy program due to the increasing price of fuel. The Direct Cash Transfer Program cannot act as a stimulator to increase productivity of parents in the long run.

Kata Kunci : Child labor,Proverty,Educationalpolicy,Indonesia