Staff Site Universitas Negeri Yogyakarta

Table

of

Contents

Keynote Papeis

1.

Ludger Deitmer, Germany, Design and evaluation of work place learning partnerships in VET (1-10)

2.

RupertMaclean, Hongkong, Vocationalisation of Higher Education: lssues and Challenges (11-18)

3.

Wahid Razzaly, Malaysia, The Development of Competency of Vocational Teachers in Malaysia:

Curriculum Development

Perspective

(t9-271

4.

Zhiqun Zhao, China, Current development and problems of vocational education in China (28-34)

Theme 1: Concepts for Competence Development in TVET

1.

Asep Setiadi Husen, lndonesia, lmplementation Concept of Training Management for Industrial

Sector Human Resources

Development

(35-44)

2.

Danny Meirawan, lndonesia, Behavior Schools Partnership with the World of lndustries and Business in lmplementation of the Dual System Education (45-54)

3.

Fouziah Mohd, Ramlee Mustapha, Malaysia, The lnfluence of Personal and Contextual Aspects on Career Decision Making of Malaysian Technical Students (55-63)

4.

lsma Widiaty, lndonesia, SDL (self Directed Learning) Through e- Learning Based on e-Pedagogy Principals for pre-Service Teacher in TVET (64-721

5.

lwan Harianton, Agus Suryana Saefudin, lndonesia, Alternative approach to deliver competence

higher skills technicians from diploma program in lndonesian higher educations toward global

competition

(73-81)

6.

Jailani Bin Md. Yunos,Tee Tze Kiong,Yee Mei Heong, Malaysia, The Level of Higher Order

Thinking Skills for Technical Subject in

Malaysia

(82-90)

7.

Jaja Kustija, lndonesia, Study Analysis of Curriculum Models For TVET Teacher Education

(s1-ee)

8.

K lma lsmara, lndonesia, Health and Safety Performance in SMK Yogyakarta (100-107)

9.

Mahazani bin Ali, Malaysia, Development of a New Empirical Based Competency Profile for Malaysian Vocational Education and Training

lnstructors

(108-117)

10. Siscka Elvyanti, Wan Azlinda binti Wan Mohamed, Malaysia, lndonesia TVETTeacher

t4_

15.

11. Fulvia Jordan, US, A case Study on Agroforestry Education: seeking a paradigm for the

Sustainable Development of Rural Youth in Darien, Rep. of Panama _1474-483) 12. Han Xu, Shijie Song, China, The survey and research ofthe participation of enterprises in the

practical teaching of secondary vocational school (484-4921

13. lskandar Muda Purwaamijaya, Rina Marina Masri, lndonesia, Learning Development of Third

Engineering Mechanic by Structural Analysis Assisted Computer foi lncreasing Understanding of

Civil Engineering Students (493-s02)

Johar Maknun, M. Syaom Barliana, lndonesia, Analysis of Teacher Education lnstitutions (LPTK)

capability To support lncreasing Proportion of Vocational High school (sMK) students (s03-s08)

Kai GlelBner, Diana Nikolaus, Germany, Teacher training in lndonesia with a focus on

Sustainable Development - Concept for a Joint Project between the OvGU Magdeburg and p4TK Medan (s0s-s16)

,u.W,',{oonesia,DoesltPaytolnVestinVocationalEducation?:AnEmpirical

Evidence from lndonesian Data (s17-s25)

Mohd Ali Jasmi, Mohd Amin Zakaria, Sahul Hamed Abdul Wahab, Malaysia, perception of

Lecturers on Workload in Relation to Effectiveness in Teaching and Learning at Polytechnics

(s26-s33)

Mohd Amin zakaria, Norani Mohd Noor, Mohd Ali Jasmi, Malaysia, culinary Art Education : A Demanding Profession ln Culinary Tourism for Malaysian's New Economy

Niche

(534-s42)

Mumu Komaro, Amay Suherman, Yayat, lndonesia, Comparative Study of lmproving TVET

Student Learning Outcome using Competency-Based Module with Teacher centre at the Initial of a Different Ability (s43-ss0)

20. Norman Lucas, UK, Researching the Learning of TVET teachers in the workplace (ss1-ss6)

21. Ramlee Mustapha, Norhazizi Lebai Long, Fouziah Mohd, Malaysia, Career Decision Process among Women in Technical Fields (ss1-s6s)

22. Sahul Hamed Abdul Wahab, Mohd Amin Zakaria, Mohd Ali Jasmi, Malaysia, Transformational of Malaysian's Polytechnic into University College in 2015: lssues and Challenges for Malavsian Technical and Vocational Education (s70-s79)

23. Soeprijanto, lndonesia, The Role of Cooperation Partners to the lmplementation of Synergic

Partnership Scope in Preparing Vocational Teachers (s7e-s8s)

24. Wahono Widodo, Agus Setiawan, lndonesia, lmproving Problem Solving Skill on Prospective Teachers of Vocational School in Foods Programs through

"MiKiR"

(596-593)

1,7.

18

Proceedings of _{the 1"tUPl lnternational Conference on Technical and Vocational Education and}

Trairtrg Bandung, lndonesia, 10-1 1 November 2O1O

Does

lt

Payoff

to lnvest

in

vocational

Education?:

An

Evidence

from

lndonesian

Data

Losina purnastuti

Un ive rsitas Ne g eri Yogya karta (yogya ka rta state U n ive rsity) UNY, Kampus Karangmalang yogyakarta _{SS2B1, lndonesia}

lpurnastuti@yahoo.com

Abstract

This paper compares estimates

of the

rate

of

returns

to

schooling for workers

General

Senior

Secgldav

School

(GSSS)

and

workers graduated

from

Vocationd Secondary School (vsSS). Utilising data from lndonesia _{Famil! Life Survey 4,}

thi;

_papera the _{returns to general education and vocational education in}

tnoonesi;;;;

ir,"

rrii,i#r;,,

function model' The estimates of the returns _{to education show that, in gJneral, those}

ir

education

are not

likely

to

earn more than those

in

_{vocational education. This result}

d

support the commonly held assumption that private returns to general education exceed returns to vocational education.

lntroduction

The

impetus

for

this

study arose from

the

debate

on

the

relative benefits of education

and

of

general education

that

is

still

ongoing

in

developing corntries, lndonesia. scholars have consistently raised

questionsiuolt

_{the utility of Jducational invr}

in _{vocational education. Many studies show that, in}

general, vocational education has lower

to

education

than

general education.

This

leads

1o

the

generally accepted view

that

r

secondary schooling is

a

better investment for

the

_{individrial [see}

psachl.p"rr",

ig?i,

Using _{the lndonesian Family Life Survey - Wave}

4

_{(zoozl2ooa;, tl.is stuoy aoos}

evidence

b

debate, identifies

the

individual gains

from

educaiion,

and

sheds

,on.'l

tigr,t

on the dsl

between vocational and general education advocates.

The

rest

of

this

paper

is

organised

as

follows. Section

2

presents

a

_{brief descriptirr} vocational senior secondary schools in lndonesia. _{section 3} provides _{a critical literature}

revier

previous empirical studies. Section

4

briefly describes

the data

and econometric r

Section 5 discusses the _{results. The final section then offers some concluding remarks.}

2

_{Briel Description on Vocational secondary}

schools

_{in lndonesia}

Technical

and

vocational education

had taken

into

operation

in

lndonesia before proclamation

of

_{independence.}

The

_{main purpose}

of

the

education

*as

to

provide

the

ba knowledge _{and skills needed by lndonesian people. At that time, the knowledge}

and the levd skills supporting national development were not taken into account. Before inde"pendence,

in lndonesia were classified as schools for women, schools of engineering, _{schools of} aqri and schools of commerce. After independence, schools were classified as schools of house affairs,,engineering education, and _{agriculture education [Soenaryo et}

al.

_{2oo2).Today, vocati} secondary schools are classified as schools of agricultuie and fbrestry, tecrrnotogy and indusfiy6

business and management, social/community welfare, tourism, arts and handicrafts, health,

ard

marine. Briefly, the structure of the _{education system in lndonesia can be oulined as follows.}

P*ft*idiksc? **k+*Falt $s}:**l *dx*at6*n

F***i+$iic*,"! l"u*r 5allc*t*lr

**{-i} f-S*h{}m* _ll*u***i*lv

{+ rtcr,:'r*l .l:f,:.,l*tr

#+rtfurfi?#f fr+j;:l*tulr!

fi ti

I

t[*rw*r#, .

I Sp#r*#*k*+#rri l

?i

li li

; Sr*,€t{ i

t:

I

.FiF*&irtf, a

t:

tl

N

N" "'

:tf r Bi[ l*'! :H *' '.8 C

i;

s

I*'''

ffir

tr*k*t a t&Er**l *

ltdExre*A !

S*rrn*e.;n I

Fi'ey Sr**r* :

i- --:*,1-"i

I I8&*A Pr&f;Saf, !

I &n*h r

l&rr***u*rr* l

i.., ..., _,..,_.,, -",i

[image:5.595.28.563.13.507.2]

Source: MoNE (EFA), 2007

Figure 1: Education System in lndonesia

The formal school system consists

of the

following levels

of

education: basic education, secondary education, and higher education. Apart from the levels of education mentioned above,

pre-school education

is

also

provided.

The

types

of

_{secondary education include general} secondary school, vocational secondary school, religious secondary school, service secondary

school,

and

secondary

school.

General

secondary education

gives

priority

to

expanding knowledge and developing students' skills, and preparing them to continue their studies into highel education. Vocational secondary education gives priority to expanding specific occupational skills,

and

emphasizes

the

preparation

of

students

to

enter

the

world

of

work and

to

lifting their professional aspirations. Vocational Education in lndonesia starts in the senior secondary school

-grades 10,11,12 or 13.

3

Literature Reviews and Previous Empirical Studies

The human capital model is the model most widely used to explain the relationship between education and labour market outcomes. lt was first introduced by Adam Smith

in

1776 in his book

The

Wealth

of

Nations. However,

the

recent popularity

of the

model

is

due

largely

to

the developments by Schultz [1961], Becker 119621, and Mincer 119741. The core

of

Human Capitat Theory (HCT)

is the

idea

that

investments

are

made

in

human resources

in

order

to

improve productivity, and therefore employment prospects and earnings. ln the human capital model, an individual invests time and forgone earnings in order to obtain higher future benefits. The primary means of assessing the value of the educational investment is the internal rate of return. A number of methodologies have been proposed to evaluate the magnitude of the return to schooling, but the

f*.tjg* r{

, &ri**rt

one that has become

a

cornerstone

in

this empirical research is

the

human capital eamiqgr function proposed

by

Mincer 119741

in

his study Schooling, Experience and Earnings.

ilfrur

argues

that

investments

in

human capital take

two

complementary forms: formal

schooQ"

measured

by

years

of

school completed; and on-the-job training, which can

be

measured

fi

potential years in

the

labour force subsequent

to

the

completion

of

schooling.

There is

a

vast body

of

research on return

to

schooling. However, empirical studies

m

returns

to

schooling

in

the

case

of

lndonesia

are

sparse, particularly studies

that

focus

c

vocational education.

This

section reports summaries

of

selected research

on the

retum

b

vocational education. With regard to both developed and developing countries, the focus in

tis

instance is on establishing the conventional wisdom with respect to the magnitude of the retum

b

general and vocational education.

Six

studies

are

covered here. Psacharopoulos [1994]

ad

Bennell [1996] review

the

return

to

general and vocational education using data from

varixr

countries. Dearden et al. ₁₂₀₀₂₁ and Sakellariou [2003] evaluate the private return to general

ad

vocational education in developed countries, namely Britain and Singapore, respectively.

Moer**

et al. _[2003] and El-Hamidi _{[2006] examine} the private return to general and vocational educatin

in developing countries, namely Thailand and Egypt, respectively.

Generally, the literature that compares

the

return

to

vocational and academic educatin

comes from less developed countries. Psacharopoulos _[1994] reviews rates of return estimates

b

general and vocational secondary education from 24 countries. This review provides evidence

tH

the

returns

to

general education are larger than returns

to

vocational education.

In contrat

Bennell [1996] affirms that the average rates of return to general and vocational education:re

almost identicalfor Latin American and Caribbean countries.

Utilising data from the 1991 sweep of the National Child Development Study (NCDS) and

tlp

1998 Labour Force Survey (LFS), Dearden et al.120021 evaluate a comprehensive analysis of

tln

labour market returns

to

academic and vocational education in Britain. Without considering the time invested

to

acquire each qualification, Dearden

et al.

120021 find that the wage premiun

associated

with

academic qualifications

is

typically higher than

the

premium associated

wilr

vocational qualifications at the same level. However, after taking into account, the amount of

tinp

taken to acquire different qualifications, the disparity narrows.

Using data from

the

mid-1998 Labour Force Survey, Sakellariou [2003] examines

tle

relationship between education and earnings in Singapore. This study utilises a Mincerian eamirgs

function to estimate returns to formal and vocationalitechnical education. The main results suggest that the returns to vocational education (10.3 percent for secondary vocational education and 12-l

percent for post-secondary vocational education) are only slightly higher compared with the retune

to

formal education

(9.4

percent

for

secondary formal education

and

1'1.3 percent

for

pos& secondary formal education).

Moenjak et _{al. [2003]} examine the relative returns between these two types of education

il

the

upper secondary level

in

Thailand. This study utilises data from Thailand's Labour Force Survey for the years 1989 to 1995. The OLS estimates of the Mincer earnings model suggest

thd

upper secondary vocational education has higher earnings returns by 23.8 percent for men and

20.7 percent for women, compared

to

general education at the same level. Furthermore, after

taking into account possible self-selection and other factors, such

as

experience, marital and migration status,

the gap

of

returns

to

education between vocational education and general education are even wider. Men with vocational education obtain returns to schooling 63.9 percent

higher than those

with

general education. Women with vocational education

gain

retums to schooling 49.4 percent higher than those with general education. lndeed, the overall resuhs

suggest

that

investment

to

improve access

to

vocational education might prove

to

be

more beneficial.

Adopting Mincer's earning function, El-Hamidi _[2006] identifies the relative returns between vocational and general education in Egypt. The empirical analysis of this study is based on a 1998 nationally representative household survey, the Egyptian Labour Market Survey (ELMS). ln order

to reduce self-selection bias, the author includes control variables that might capture part of the unobserved components in the error term such as family background characteristics. To solve the

problem

of

sample selection bias,

the

2SLS approach,

as

suggested

by

Heckman _[1979],

b

applied. The results indicate tlrat the private rates of returns to vocational secondary education are higher compared to general secondary education. The differences are 29.3 percent for men and 2.1 percent for

women.

,

h

and _{Econometric Specification}

Dtta

The data to be used in the analysis were obtained _{from the lndonesian Family Life survey}

-iJ[|.til^tl:-,Jlo:,?:,1.1"_:l,lr_

_rcmrc

and

_{hearth survey.}

The

!"_r,,"v iriiii"i"

,

continuins ronsitudinar

survey coilects data

on

iroiriorrr'''r;;X#;Yr,

_,n",,.

P^".,:,[":":J"le:..t".communities

in_which

t"v-rir",'rnl"tn"

hearth and education

thev use. |FLS4 was fierded

in

rate 2oo7 and

"rrry

zboa

"r'ln"'=r1xl"1;isii:x1"d

fl:*:J*':il'j

rI'-1?rrq,hor"rords

and

q+,toiind;iJu}.

*"r"

interviewed. 'e(]. tFLD4rFLS4

a mllaborative _{effort by RAND, the center for Popuiation}

ano poticy studies

(cpps)

of the

ersity _{of Gadjah Mada, and Survey Meter.}

tftl

The Modet

ln estimatino returns to vocational and general _{education, the earnings function}

method will

h

used' Both a Ystandard wtincerian;r9 *q"rr as an

-'Lrg;"nt"d

_{Mincerian, specification of the}

ffi;Jlnction

will be utilized. ln the standard specricaiion, returns to educaiion are estimated

_\-.tlii

..

-

/:c

+

₄

.,)

i,r,_5.nitrr:.;_ +;?,8.i-.

_

.:,5.i:

+ ;:_J"

*,:

_{+

where

Z

denotes a _{vector of variables that are held to capture the set}

of individual characteristics.

ln(E,) ₌

Fo*0,5,+FrW,+

B.EXI

+t,

(1)

flrere

Ei is log of monthly earnings, _s; is the number.of years of schooling, EX1 is years in labour market or experience, EX;2 is _{expdrience squared, and e}

ii

denotes the error term, which embodies

fte

effect of all of the determinants _{of wages or earnings}

besides schooling and experience. The

ryecification

is

shown logarithmically

in

_order

for

the"iegr"."o* io

_{be interpreted}

in terms of

nmarginal _{effects' ln this way index B is interpreted}

as tre"rate of return to schooting. This semi-hgarithmic equation that

his

oeen'introouced _by

uincei llol+1is known;; th"

_human

capital

enings

function' _{lt has been the basis of practically att}

reseaich on returns to education.

ln

order

to

allow

for

the estimated rate

of

return

to

vary in terms

of

level

of

schooling,

8$'ation (1) needed to be modified. To add an educationar revel dimension to th"

rr"rrg"

rate of retum concept, one can sub.stitute

s

(the number of years of schoolingl

*iir,

u

""ries

of dummy uariables for different educational leveL, such as primary, selonoary, _{university, etc. The modified} fitincerian earnings function is:

ln(E,)=

Bo+l1rs.Dum,o

_{+ B,EX,+ B.EXI +e}

,

.

(2)

nfiere s'Dum consists of dummies for levels of education. ln this specification, the private rate of returns to education to the kth level of education i"

""tirui"o'by

the following formula:

,o

- ll"-i:{

:jj

nfrere _B1 is the coefficient of a specific

'*i|ri

education, B1-1 is the coefficient of the previous tevet

of _{education, and An is the diffeience in years}

of

schoolinj-["t*""n

_{k and k_1.}

ln this paper, the standard Mincerian _{wage equation is augmented with the set}

of individual characteristics summarized _{by Zi}

(e.g.a

_{resilentiat oummy}

lurban

or

rural), dummy

for

being

married' and dummy for provinces. 'Th]e _{augmented modified Mincerian earning}

function is:

4.3

Estimation lssues

Estimates of returns to education using

a

simple/standard method (OLS) may suffgr several shortcomings. These include omission

of

relevant variables (omitted variable bias[

endogeneity of schooling (endogeneity bias). Although several approaches to these problenrs been developed, this study does not fully benefit from them due to data limitations. Many st employ some relatively sophisticated methods, such as using proxies for unobserved utilising natural variation, and methods of exploring twins or siblings to handle the omitted rrai and endogeneity problems. However, many of the previous studies have provided evidence there are no significant differences between results obtained from innovative methods and

from the standard method. Thus, the majority of the empirical studies confirm that the method is a reasonably robust way to assess the link between schooling and earnings _[see G

and Harmon 1999; Cheidvasser and Silva 2007; Comola and Mello 2010; Dufto ZOOi; Lam

Schoeni 1993; Miller et aI.20061

4.4

VariablesDescription

To

evaluate

the

returns

to

education

in

lndonesia,

a

worker's specific human capild in

approximated by dummy variables to represent the levels of schooling of workers and by the

yean

of

potential experience. The dependent variable in the earning equation is

the

tog

bf

mr;rflf

earnings. There

are six

dummy variables

for

education indicating

the

level

of

educatinrd attainment, namely Primary School, Junior Secondary School, General Senior Secondary Sctrod Vocational Senior Secondary School, College, and University. An experience variable is

indud

in the model since, ceteris paribus; workers with more years of job experience are likely to

ean

more. Higher experience is often associated with higher skills and higher productivity. _We

defiret

worker's potential experience as his/her age minus the number of years of schooling, minus seugr, years' This is based on two assumptions. First, it is assumed that all individuals start schootirg

il

seven years old. Second,

it

is assumed that people get employed immediately after

comptaig

school.

The

potential experience squared variable

is

included

in

addition

to

the

poteil-experience variable to capture the possibility of a non-linear _{relationship between experience}

ad

earnings. ln general, differences in labour market conditions exist between rural and urban arelirc Control for these differences is achieved by including residential dummy (urban or rural) in

ilp

earnings equation. Other control variables in this respect include dummy for provinces in

orderb

proxy

for

potential differences

in

education level, production structure, and other social

ad

economic indicators. All the variables used in the analysis are defined in Table 1. Table I Definition of Variables

Variable Definition

Earninqs Natural logarithm of monthlv earninos

Primary School 1 if an individual completed primary/elementarv school : 0 otherwise Junior Secondarv School 1 if an individual completed Junior Secondary School: 0 otherwise General Senior Secondary School

1

if

an _{individual completed General Senior Secondary SChml; O}

otherwise Vocational Senior Secondary

School

1 if an individual completed Vocational Senior SeconOary Scfro* O othenruise

Colleqe 1 if an individual completed Diploma; 0 otherwise

Universitv 1 if an individual corlpleted university education; 0 otherwise Experience Number of years _{individual has been workino}

Experience2 The square of Number of years individual has been workino Urban 1 if individual live in urban area: 0 otherwise

Marital Status 1 if individual is married; 0 othenailse

North Sumatera 1 if individual live in North Sumatera: 0 otherwise West Sumatera 1 if individual live in West Sumatera: 0 otherwise Riau 1 if individual live in Riau; 0 otheruyise

South Sumatera 1 if individual live in South Sumatera; 0 otherwise DKI Jakarta 1 if individual live in Jakarta: 0 otherwise West Java 1 if individual live in West Java: 0 othenruise

Central Java 1 if individual live in Central Java; 0 otherwise

[image:8.595.111.551.526.769.2]

Yogyakarta

East Java

Banten _{1 if individual live in}

Ban[en; 0 o

1 if indirridr ral lh,^ i^

Bali

South Kalimantan

-

t if individual live in South S 1 if individual live in West

South Sulawesi

West Sulawesi

5

Estimation Results

ln this section we present _{the study's empirical results assessing}

the effects of vocational and general education on earnings _{. Table 2 shows the six regressions that will be}

the basis for the analysis' There are three _{set oispecifications:}

iil

rtrro"J'Mincerian

and augmented _Mincerian estimate for all samples; _{(ii) standard Mincerian uno}

,rg;"nted

Mincerian estimate for men; and

(iii) standard Mincerian and' augmented _{Mincerian estim"ate for women. gou"aiion}

level, potential experience' _{and potential experience square explain}

about 1B percent or

in"

changes

in

log

monthly _{earnings for all workers and male workeri,}

,nd-ii

percent for female workers. Education

level' _{potential experience, potential experience square,}

Liation

dummy variable, marital status dummy variable, _{gender dummy variable, and provincial dummy variable explain about}

27 percent of the changes in log monthly earnings for all workers, 23 percent for workers, and 29 percent for female workers' The coefficients for "most of the independent variables are _{statisiicatty significant} and have the expected signs.

The coefficients of the education dummies all have the expected positive _{sign, and most of}

them are significantly different _{from zero at}

the

_{1 percent revel. Experlenc"}

#s

6e

expected

profile'

A

_{positive sign}

of the

_{experience variable}

indicates.

wgrfilo

experience

is

_{likely to} contribute

to

the growth _{of an individual's human}

"rpitJ.-Erh

additional year of experience is

related to an increase in wages of about 1.4

-

L 9 percent. _{A negative}

"o"m"i"nt

of experience square as marginal returns from experience tend to decline over the lifetime. The results _{imply that,} on average' there is a wage _{increase with experience until a peak at 30 years,}

and then a decline. All the _{coefficients of oulnmy for area}

luiuanirurarl is positivJ

rhis

impries-t#t

*Jrr."rs

beronging

to urban areas obtain a _{higher benefii than workers belonging to rural areas. Another}

interesting result from the _{earnings function estimates is that married w-orkers}

are more llkely to receive higher earnings' The reason for this fact _{is probably because}

,roi"J

_{workers have a}

higher motivation to work _{harder and thus spend more time working since they}

r",rr" to look after theiriamily.

The main difference between

the

_{results from}

ihe

_{standard Mincerian model and}

the augmented Mincerian model

lie

in

the differences

in the

estimates

of

the

_{relative returns to} vocational education as compared _to general education. The _{results show that the coefficient of} education _{level for vocational educati6n is higher ttran}

genlral

education

fo;

;ii

specifications, unless _{the augmented model for men. The magnitudes}

oithe

[image:9.595.62.484.85.160.2]

estimated returns are lower for the augmented Mincerian approach. However, the differences are subfle.

Table 2 _{Estimated earnings equations (standard}

Mincerian and Augmented Mincerian)

Alt _Male

Female

Variable _{Standard Augmented}

5.283 (272.90\*** Standard Augmented Constant 5.315 (315.82)*"* StanOard _Auomented 5.380

(269.61)*. 5.275(231 .27)"** 0.10 (7.20\**"

5.234

(177.74\*** 5.091_(146.67).. Primary

School

0.092

(2.58)**" 0.079(6.89)**" 0.104(7 _.34\*** 0.019_(0.89) 0.205 (8.02)"** 0,013 (1.s0) Junior Secondary School 0.228

(16.16)*** 0.194_(14.34)"*. 0.216_{( 13.12)*""}

0393

(23.99)*"*

0.1 94

(12.10)*". 0.194_(7.79)** General

Senior Secondary School

0.411

(2g.gg)*** 0.346(25.12)**" 0.344_(21.13r.. 0.385_(14.73) 0.361 (14.01)***

Vocational Senior Secondary School 0.421 (27.07)**" 0.347

(22.79)*** (22.21)**"0.398 0.341(19.94)"** 0.406(14.06)***

0.370

(12.93r**

College 0.591

(0.22\*** 0.565(27.79\"** (20.89)"**0.585 0.530_(19.28r 0.622_(18.66)** 0.610_(18.70)"** University 0.704

(39.17)*** 0.661(37.77\** 0.683(31 _.47\**" 0.639(29.65)"** 0.730(23.93)"** 0.703(23.21\*** Experience 0.019

(19.62)"** (15.20)"**0.015 0.018( 1 6.31 ).

0.014

fi1.24\***

0.017

(10.69)"** 0.018(10.52)**" Experience2 -0.0003

(-17.47\**" -0.0003(-13.96)*** -0.0003(-14.60)*** -0.0002(-10.67)*"* -.0003(-9.70)*** -0.0003(-9.25)***

Urban 0.096

(12.03)*** 0.098_(10.32)**" 0.921_(6.26)***

Marital Status 0.081

(8.52)*"* o.117_(9.09)*"* 0.026 (1.78)

North

Sumatera 0.106(5.91)*** 0.114_(5.32)*** 0.092_(2.89)***

West

Sumatera 0.1 (7.99)""*58 0.1 (7 _.14\***68 0.138_(3.87)"**

Riau _0.239

(5.60)*** 0.230_{(4.7 5\**'} 0.259_(2.93)*"* South

Sumatera {6.93)***0.148 0.1 (6.90)**"67 0.063_(1.40)

DKI Jakarta 0.1 90

(1 1 .1 3)***

0.'165

(8.03)*"* 0.246_(8.07)*""

West Java _0.062

(4.29\""* 0.040(2_31\** 0.114_(4.25\***

Central Java -0.083

i-5.61)***

-0.073

(-4.1 0)**"

-0.086 (-3.26)*"*

Yogyakarta -0.059

(-3. 1 0 )***

-0.058

(-2.53)*" -0.045_(-1.38)

East Java _0.008

(0.56) -0.010_(-0.60) 0.059_(2.17)**

Banten _0.187

(8.49)**" 0.110_(4.20)"** 0.362_(8.92)***

Bali _o.042

(2.17\* 0.007 (0.32) o.120_(3.52)*""

South

Kalimantan 0.124(6.51)**" o.134_(6.08)"** 0.089_(2.38r

South Sulawesi

-0.095

(-4.39)*** -0.102(-4.05)*** -0.790_(-1.93y

West

Sulawesi 0.102(1.15) 0.204_(2.04\** -.0245

G1.32\

Observations 12,840 12,840 8.675 8.675 4,165 4,165

R, 0.18 0.27 0.18 0.23 0.22 0.29

Source: Author's calculation

Note: Robust

t

statistics in

*significant _{at 10%} level.

parentheses; *** _significant

at

_{1% level;} **Significant

at

_{5% tevel:}

Turning to the private returns to schooling, in particular for _{general and vocational education,} Figure

2

presents _{the findings. The private retums}

to

_schooling

for

_vocational

education are

generally slightly _{higher than those for} general education. _{The retuins to schooling range between}

5

-

6'1

percent _{and about 4.9}

-

_{6.7 percent for general education}

and vocaional education, respectively.

on

average, the earning gap between general _{senior secondary school graduate} workers and _{vocational senior secondary school grad-uate workers}

is

_{less than 1 percent.}

This figure does not support Psacharopoutos'[tss+1 _{coiclusion. Hence, this confirms Bennell,s t1996l} argument, that the average rates of return to general _{and vocational education are very similar in} the context of lndonesia.

5.07 5.1 r

.l

f,

:

,.

t:

:

i

0r.

6

Concluding Remarks

The lndonesian Family Life survey-provides

an

opportunity

to

estimate returns

to

general and vocational education in _{the context of'this particular country. Adopting the Mincerian earning} function, this paper analyses the returns to general and vocational education _{study has shown that education}

in

lndonesia. This significantly _{improves the earnings}

of

_{individuals. Moreover this} study adds new evidence

to

the

debate

on the

relative merits

of

vocational senior secondary education and of _{general education at the same level. The}

results challenge the common argument

that

a

_{general education provides higher returns}

to

_schooling

than

_{vocational education.}

On average, the returns to _{vocational education and general education are almost identical.}

This study only assesses the gross effect of

the

education pathway.

with

_{additional data,} providing _{a more detailed education track, it would be possible}

to _{divide vocational education with} more precision than the _{relatively global tracks (vocational) examining the differential returns}

in that manner' Private returns to schooling, particularl'y _{return to general and vocational education,}

is the focus for this study. However, it is widely perceived that

thl

effect _{of eoucaiion-is not onty private} economic effects, but also externalities for individuals and society at

large.

ft woufo be a valuable contribution to estimate the externalities of vocational education in further research.

REFERENCES

Bennell, _P (1996): _{"Generalversus vocationalsecondary}

education in developing countries: a

review of the rates of return evidence", Journal of Development Studies, Vof -

ga,"pp

230-247. Callan, Tim and Harmon, Colm (1999): "The Economic Return

to

Schooling

in

lreland,,, Labour Economics, Vol. 6, pp. 543-550

Sh,4

{.All}

ALrg

iAtli

Srvl

itvll

ALrg. itr,1} 5t!1

iFi

ALrs _iFl

i

ffi _{tlicnr..r;l 5enjor 5tcorrrJary School ::S \.ioi-:irtion.rlsrnior Sp1on{nrir}

SrjhoDl

i

i

rvrrrrrJgrilur rl.L.u[1tril\]

[image:11.595.60.429.101.373.2]

Note: SM: Standard _{Mincerian, Aug: Augmented Mincerian, M: mare, F: femare}

Figure 2: The Private Returns _{to General and vocational Education: Standard Mincerian}

and

Augmented Mincerian

cheidvasser, _{sofia and silva, Benitez Hugo (2007): "The Educated}

Russian,s curse: Returns to Education in the _{Russian Federation during the 1gg0s,,, Labour. yor.}

21, No.

2.

pp.1_14

comola' Margherita _{and Luiz de Mello (2009): "The Determinants_}

of Employment and Earnings in

rndonesia", oECD Economics Department

wortinj

ea;;;;,

N;

_{690, oECD FuUii"ning} Dearden, Lorraine., _{Mcrntosh, Steven.,}

Mv:\:

_{Michar and Vignores,}

Anna (2002):,,The _{Returns to} Academic and Vocational Qualification in-Britain", pp.249-274 Bulletin oi'E"onomic Research, Vol. 54, No. 3

pu.flo, Esther

QaU):

"schooting _and lndonesia: Evidence from an Unusual 91, No.4. Pp. 793-813.

Labor Market Consequences

of

_{School Construction in} Policy Experiment", _{The American Economic Review, Vol.}

El-Hamidi, Fatma (2006): ',General _{or Vocational schooling?}

Evidence on school choice, Returns,

and '$heepskin' _{Effects fron: Egypt 19g8',}

The Journal oi Foricy Reform vot.

9,

No. 2, 1 s7-176.

Becker' Gary

s

(1962): "lnvestment _{in Human capital: A Theoretical}

Analysis, ,, Journat of potiticat Economy, Yol. LXX. pp. g - 4g.

Hawley' J'D (2003): "comparing _the payoff _{to vocational and academic credentials}

in Thailand over time". lnternationalJournal _{ot fOucaiionaf Oeveiop-men,l uo,. 23, pp.6ot_62s.}

Lam' David and schoeni F. Robert (1993):

laT"^"r:.:, Famiry Background on Earnings and Returns

to schooling: _{Evidence from Brazil", Journal of Political Economy,}

Vol. 101, No.

4.

pp. 710-740.

Miller' Paul, Mulvey, charles, and Martin, Nick (2000): "The return to schooling: _{Estimates from a} sampre of _{young Austrarian twins", Labour Economics" vot.}

ig.

_pp.

571_587.

il#v;*

(97$:

schooling, Experience and Earnings. Nationat Bureau of Economic Research.

Ministry of National Education _{(2007): EFA Mid Decade Assessment: lndonesia. EFA secretariat} Ministry of National Education, _{nepuntic of lndonesia}

Moenjak, Thammarak and _{worswick, christopher (2003): "Vocational education}

in

Thailand: a

study of choice and _{Returns", Economics of Education nlriiew}

, vor. 22. pp. 99_107. Psacharopoulos, _{G (1973): "Returns to Education: An}

lnternational comparison

(san

Fransisco,

CA, Elsevier, Jossey-Bass).

Psacharopoulos,

G

_{(1994): "Returns}

to

_investment

in

education:

a

_{global update,,, wortd}

Development, Vol. 22, pp. 1325_1343.

sakellariou'

chris

(2003): "Rates

of

_Return

to

_lnvestments

in

_Formal

and rechnical/Vocationat Education in _{Singapore,,. Education Economics, Vol.1f ,'frf".f}

, pp.73_87.

schultz, T'

w

(1961): _{lnvestment in human capital, American}

Economic Review,March.

smith'

_volumes Adam' 1776 _{I and rt. R. H. [1981]- campbeil}

An

lnquiry

into the

Nature and causes

of

the wealth

of

Nations, and A. S. skinner, eds. linertv Fund: rndianoporis.

soenaryo

et al,

_{(2002): sejarah Pendidikan Teknik dan Kejuruan}

di

lndonesia: Membangun Manusia Produktif, Departemen Pendidikan Nasional, Direktorat Jenderal pendidikan _{Dasar dan} Menengah, Direktorat pendidikan _{Menengah Kejuruan,}

.lat<arta.