Best Paper: With Education, Poverty is No Longer Inheritance

Indonesia has succeeded in declining poverty rate to less than 10 percent of the country population as of March 2018, a data from the Central Statistics Agency (BPS) shows. However, the 2016 World Bank’s report states that economic inequality in the country tends to increase since the beginning of reformation era. Gini coefficient, which commonly used to describe inequality, rose to 0.4 last year from 0.3 in the 1990s.

Poverty and inequality are passed from parents to their children because those who come from poor families face difficulty in accessing basic service, including quality education. Meanwhile, children from middle-income family are able to afford quality education. This factor has widened the inequality gap.

A number of researchers have observed the correlation between parental well-being and the impact on their children. In many literatures, the concept is known as the intergenerational mobility.

The higher the correlations between children and parents’ variables are, the lower is the mobility. On the other hand, the lower correlations show higher mobility (Levine & Jellema, 2007). 

Educational attainment is one of the most commonly used variables by economists and sociologist to see how far the socioeconomic status is passed on from one generation to the next. Literatures discussing about this topic states that there are some external factors affecting intergenerational education mobility, such as an increase in government spending on education.  (Latif, 2017; Mayer & Loppo, 2008; Solon, 2002), mass construction of public schools (Hertz & Jayasundera, 2007; Duflo, 2001) and abolition of school fees (Jerim & MacMillan, 2015).

Senza Arsendy, an education practitioner, researched about the level and pattern of educational mobility before and after the economic crisis in Indonesia. He sees that in the last decade, the public policies in the education field have potential to increase the mobility among generations in Indonesia. The paper entitled “The Role of Public Policy and Economic Quality on Intergenerational Mobility Trends in Indonesia after the Asian Financial Crisis” won the Best Paper award in Indonesia Development Forum.

Increased Budget on Education and Early Education School (PAUD)

The research shows a significant correlation between parents and children’s educational attainment. The higher the education of the parents is, the higher is the education of their children, and vice versa. Parents contribute to their children’s educational attainment through two different and interrelated  mechanism, namely the biological factors and the parenting style.

Firstly, parents’ abilities can be passed on to their children through genes and other biological factors. Secondly, parents can affect the future of their children by investing in their development. The educated parents can effectively invest in their children’s development by providing them with financial, social and cultural supports.

Indonesian Household Life Aspect’s survey shows there is significant intergenerational mobility, which is related to education, in 2007 to 2015 compared to previous periods. The high intergenerational mobility is in line with a number of educational policies made during the period.

Education spending allocated by the state has increased significantly in the past few years.  From 2006 to 2008, the education budget accounted for only around 16 percent of total State Budget. However, in the next period, the figure soared to 20 percent.

The budget was increased to give opportunity to poor students to study. In 2010, nearly six million students from poor families received scholarships. The scholarship program was the third-largest household assistance program financed by the central government, after rice for the poor (Raskin) program and the community health protection scheme (Jamkesmas) (World Bank, 2012). The scholarships were given to students based on their attendance at schools. The amount of the scholarships varied depending on the level of education.

To improve the quality of education through school autonomy, the government has also developed a program called School Operational Aid (BOS). Since 2008, the operational aid has   undergone some improvements. In 2009, the aid could be used to build teacher’s capacity while in 2012 the government used the aid to encourage schools to abolish school fees. The regulation on the operational aids prohibited schools from requesting elementary and junior high schools students to pay compulsory levy (World Bank, 2013).

Starting from the 2013/2014 academic year, the government has increased the budget for senior high schools to Rp 1 million per student per year. The progressive policies were believed to contribute to the increase of educational mobility during the survey period between 2007 and 2015.

Apart from increasing the education spending, Indonesia has also taken a major step to reform the early childhood education. Collaborating with the World Bank and the Government of the Netherlands, the central government has promoted early school programs for children under five, especially to people living in rural communities (Hasan, Hyson & Chang, 2013). As a result, the early education enrollment ratio rose to 47 percent in 2012 from only 15 percent in the early 2000s (OECD & ADB, 2015).

The early childhood education reform may greatly contribute to the increase of the intergenerational mobility in the country. Literatures discussing about this matter state that early intervention can end the vicious circle of poverty and reduce some effects of educational inequalities on children (OECD & ADB, 2015).

Subsidize Education Carefully

Educational mobility in Indonesia had been increased from 1997 to 2015. It has been proven that progressive policies in education may reduce the inequality of opportunity. It shows that external measures executed by the government have contributed to the end of vicious circle of inequalities among the less-fortunate groups.

Even though education policy has been considered capable to promote mobility, some things still need to be improved. First, the government needs to improve the scholarship scheme to ensure that all awardees deserve it. The selection of scholarship recipients may also consider the level of education of the parents so that intergenerational mobility can be achieved.

Besides, the government also needs to focus on improving the quality of education. BOS can be used as a tool to improve school quality. The government must ensure that the aid is used to provide quality education for students. Furthermore, children should not only attend classes but also learn valuable knowledge and skills. Quality education will help students from poor families free from the background of their parents, which may affect their future. In the end, poverty is no longer a legacy from parents because of education.**