EDUCATIONAL DIFFERENCES AND URBAN EXPENDITURE INEQUALITY IN INDONESIA: AN ANALYSIS OF THE 2008 NATIONAL HOUSEHOLD SURVEY DATA

Vitria Susanti, S.E., Jinhwan Oh

2013 | Tesis | S2 Magister Ek.Pembangunan

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This study aims to explore educational differences and urban expenditure inequality in Indonesia by using the Theil indices based on household expenditure data from the National Socioeconomic Survey of year 2008. The results of analysis showed that there was a substantial decline in overall inequality from 0,370 in 2005 to 0,263 in 2008 and as expected, the urban sector had much larger inequality and mean per capita household expenditure than the rural sector. The urban sector contributed 62.4% to overall inequality, while the rural sector contribution was 24.7%. The findings !Tom decomposing educational groups gave evidence that the tertiary group had the highest within-group inequality in Indonesia; however the largest contributor to urban inequality is the secondary group. Within-group education inequality might be caused by the mismatch link between current education outcome and what is demanded by labor market. In this regard, government needs to emphasize education policies that support education system to prepare the workforce for adjusting with the structural shifts and changing technologies. There is a considerable gap between public and private higher education quality. Thus, policy that assures the quality of higher education is necessarily needed.

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