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Estimate of the private return on education in Indonesia: Evidence from sibling data

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  • Dumauli, Magdalena Triasih

Abstract

This study reexamines the return on education (ROE) in Indonesia to solve the puzzle between the high ROE from previous studies and the low enrollment rate for higher education by taking into account endogeneity and sample selectivity issues. This study finds the OLS estimates of ROE in between 10% and 12%. After controlling for unobserved family background using sibling data, the Household Fixed Effect estimate indicates ROE reduces from 10.8% to 5%. This study argues ROE is not as high as previously estimated and may explain why the enrollment rate for college has been stagnating in Indonesia.

Suggested Citation

  • Dumauli, Magdalena Triasih, 2015. "Estimate of the private return on education in Indonesia: Evidence from sibling data," International Journal of Educational Development, Elsevier, vol. 42(C), pages 14-24.
    • Handle: RePEc:eee:injoed:v:42:y:2015:i:c:p:14-24
    DOI: 10.1016/j.ijedudev.2015.02.012
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    References listed on IDEAS

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    Cited by:

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    2. Duerrenberger, Nicole & Warning, Susanne, 2018. "Corruption and education in developing countries: The role of public vs. private funding of higher education," International Journal of Educational Development, Elsevier, vol. 62(C), pages 217-225.

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