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School Repetition, Dropouts, and the Rates of Return to Schooling: The Case of Indonesia

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  • Behrman, Jere R
  • Deolalikar, Anil B

Abstract

Standard Estimates of the rates of return to primary schooling in most developing countries are high, and have been used to support advocacy of increased investments in primary schooling. But the standard estimates ignore repetition and dropout experience. This paper develops a procedure for estimating the impact of repetition and dropout rates and applies it to Indonesian data. The results are striking, suggesting that standard procedures overstate substantially the economic returns to schooling in Indonesia (eg. by 38 to 78 percent for primary schooling), distort the pattern of estimated returns across schooling levels by overestimating especially the returns to the lower schooling levels, and misrepresent the relative returns to schooling investments among groups identified by sex, rural-urban residence, and age. Copyright 1991 by Blackwell Publishing Ltd

Suggested Citation

  • Behrman, Jere R & Deolalikar, Anil B, 1991. "School Repetition, Dropouts, and the Rates of Return to Schooling: The Case of Indonesia," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 53(4), pages 467-480, November.
    • Handle: RePEc:bla:obuest:v:53:y:1991:i:4:p:467-80
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    Citations

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    Cited by:

    1. Rossana Patrón, 2011. "When more schooling is not worth the effort: another look at the dropout decisions of disadvantaged students in Uruguay," Documentos de Trabajo (working papers) 0511, Department of Economics - dECON.
    2. repec:eee:labchp:v:3:y:1999:i:pb:p:2859-2939 is not listed on IDEAS
    3. Elizabeth M. King & Peter F. Orazem & Elizabeth M. Paterno, 2016. "Promotion with and without Learning: Effects on Student Enrollment and Dropout Behavior," The World Bank Economic Review, World Bank, vol. 30(3), pages 580-602.
    4. Lachler, Ulrich, 1998. "Education and earnings inequality in Mexico," Policy Research Working Paper Series 1949, The World Bank.
    5. Behrman, Jere R., 2009. "What you don’t know CAN hurt you — or at least mislead you: family behaviors, unobserved heterogeneities, and the determinants and impacts of human resources over the life cycle," LSE Research Online Documents on Economics 123174, London School of Economics and Political Science, LSE Library.
    6. repec:idb:brikps:323 is not listed on IDEAS
    7. Sojo, Carlos & Behrman, Jere R. & Pérez de Rada, Ernesto & Jiménez, Wilson & Gaviria, Alejandro & Calderón Martínez, Lissette & Alves, Denisard & Teruel, Graciela & Funkhouser, Edward & Pérez Saínz, J, 2003. "Who's In and Who's Out: Social Exclusion in Latin America," IDB Publications (Books), Inter-American Development Bank, number 323, December.
    8. Gurleen Popli, 2005. "Rising Wage Inequality in Mexico: Structural Reforms or Changing Labor Market Institutions?," Working Papers 2005016, The University of Sheffield, Department of Economics, revised Nov 2005.
    9. Funkhouser, Edward, 1999. "Cyclical economic conditions and school attendance in Costa Rica," Economics of Education Review, Elsevier, vol. 18(1), pages 31-50, February.
    10. Behrman, Jere R., 1999. "Schooling in Asia: Selected microevidence on determinants, effects, and policy implications," Journal of Asian Economics, Elsevier, vol. 10(2), pages 147-194.
    11. Aashish Mehta & Hector Villarreal, 2008. "Why do diplomas pay? An expanded Mincerian framework applied to Mexico," Applied Economics, Taylor & Francis Journals, vol. 40(24), pages 3127-3144.
    12. Gurleen K. Popli, 2011. "Changes in Human Capital and Wage Inequality in Mexico," Oxford Development Studies, Taylor & Francis Journals, vol. 39(3), pages 369-387, February.
    13. Tobing, Elwin, 2011. "Taxation, human capital formation, and long-run growth with private investment in education," Journal of Asian Economics, Elsevier, vol. 22(1), pages 48-60, February.
    14. Elfindri & Edi Ariyanto & Sri Maryati & Delfia T. Sari, 2022. "Why the Rate of Return of Religious School (Madrasah) is Too Low: The Case in Indonesia," Economics and Finance in Indonesia, Faculty of Economics and Business, University of Indonesia, vol. 68, pages 51-61, Juni.
    15. Suzanne Duryea, 1998. "Children's Advancement Through School in Brazil: The Role of Transitory Shocks to Household Income," Research Department Publications 4124, Inter-American Development Bank, Research Department.
    16. Carlos Sojo & Jere R. Behrman & Ernesto Pérez de Rada & Wilson Jiménez & Alejandro Gaviria & Lissette Calderón Martínez & Denisard Alves & Graciela Teruel & Edward Funkhouser & Juan Pablo Pérez Saínz , 2003. "Who's In and Who's Out: Social Exclusion in Latin America," IDB Publications (Books), Inter-American Development Bank, number 42178 edited by Jere R. Behrman & Alejandro Gaviria & Miguel Székely, February.
    17. Horowitz, Andrew W., 1999. "Ranking Rates of Return to Education: Legitimacy and an Explicit Diagnostic," Journal of Policy Modeling, Elsevier, vol. 21(7), pages 781-797, December.
    18. Suzanne Duryea, 1998. "El avance de los niños a lo largo del sistema educativo en Brasil: el papel de las sacudidas transitorias del ingreso familiar," Research Department Publications 4125, Inter-American Development Bank, Research Department.
    19. Patrinos, Harry Anthony & Psacharopoulos, George, 1992. "Socioeconomic and ethnic determinants of grade repetition in Bolivia and Guatemala," Policy Research Working Paper Series 1028, The World Bank.
    20. Behrman, Jere R., 1996. "Measuring the effectiveness of schooling policies in developing countries: Revisiting issues of methodology," Economics of Education Review, Elsevier, vol. 15(4), pages 345-364, October.
    21. Susan W. Parker & Luis Rubalcava & Graciela Teruel, 2002. "Schooling Inequality among the Indigenous: A Problem of Resources or Language Barriers?," Research Department Publications 3134, Inter-American Development Bank, Research Department.

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