This study contributes to our knowledge on the impact of decentralization of the education sector in Indonesia. We extend existing research by examining the influence of both municipal factors and other explanatory variables on educational attainment in Indonesia. We focus on mean years of schooling as an indicator of educational attainment. We hypothesize that after decentralization, (1) educational attainment is higher compared to the pre-decentralization era, (2) regional variations in educational attainment will have increased, and (3) the fiscal capacity, degree of urbanization, and development will be higher, the higher the municipality’s mean year of schooling. The latter is also expected for the newly created municipalities of the past years. We test the hypotheses with panel data on 5,541,983 respondents aggregated to 3880 observations nested in 491 districts/cities nested in 32 provinces for the pre- and post-decentralization era. The results reveal the following. First, after decentralization, the length of schooling slightly increased, but progress in the length of schooling has slowed down a bit. Second, educational attainment variation between provinces slightly decreased, but the variation among municipalities increased. Third, the degree of municipalities’ development and urbanization has a significantly positive impact on improving educational attainment, while the fiscal capacity and the status of being a new municipality do not have a significant effect on extending the length of schooling. Our findings suggest that especially rural areas and less developed municipalities have lagged behind in the attempt to improve Indonesia’s educational attainment.
- Educational attainment
- Regional variations
- Local government
The first author is the original researcher and serves as the author for correspondence, the remaining authors are promoters and supervisors listed in alphabetical order who also have contributed to this chapter.
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The Regional Government Law No. 32/2004 and Regional Fiscal Balance Law No. 33/2004.
According to Ministry of Finance decree No. 54/PMK.07/2014, fiscal capacity refers to an overview of each region’s financial capacity which is reflected through the general revenue in Local Government Budget (excluding Special Allocation Fund, Emergency Fund, old loans, and other revenues restricted for financing certain expenses) to fund the government’s duty net of personnel expenditures and the number of poor people.
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Muttaqin, T., van Duijn, M., Heyse, L., Wittek, R. (2016). The Impact of Decentralization on Educational Attainment in Indonesia. In: Holzhacker, R., Wittek, R., Woltjer, J. (eds) Decentralization and Governance in Indonesia. Development and Governance, vol 2. Springer, Cham. https://doi.org/10.1007/978-3-319-22434-3_4
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