Education Cash Transfer and High School Enrollment in Indonesia

Abstract

Smart Indonesia Program (Program Indonesia Pintar/PIP) is a policy made by the Indonesian
government that aims to guarantee and ensure every child has access to a decent education and has
the same learning opportunities at all levels of education. However, the enrollment rate at the
secondary level, especially in senior high school, is still far from the government target, as stated on
the National Medium-Term Development Plan of 2015-2019. This study aims to understand the
PIP’s impact on the probability of getting an education in Indonesia's Senior High School (Sekolah
Menengah Atas/SMA). This study applied logistic regression analysis to determine PIP's effect
regarding children's opportunities at the age of 16-18 years old to attend school. This study uses data
from 16-18 years old children who belong to the households categorized as the 40% lowest
expenditure group in Susenas 2017, to align with the PIP’s target based on Integrated Database (Basis
Data Terpadu /BDT). The result reveals that 16-18 years old children in households included in the
lowest 40% of expenditure who receive PIP have higher and significant probabilities of attending
high school level in Indonesia. Administration of PIP to 16-18 years old children from the 40%
lowest expenditure group will increase their chance to participate in senior high school/equivalent
by 15-25 percent. The characteristics of the beneficiaries such as gender, education level of the head
of the household, and residence area can affect PIP's performance in escalating the probability of 16-
18 years old children attending senior high school/equivalent.