THE IMPACT OF EDUCATION IN INDONESIAN INCOME PER CAPITA

Abstraksi

Hanushek and Kimko (2000) in Jamison et al (2006) in NBER Working Paper No.12652 October 2006 found a positive and strong link between the quality of education and the level of GDP growth of a country. Meanwhile, Mocan (2014) in the April 22, 2014 Wharton Research Scholars studied the impact of level of education of Turkish society in Turkish income and found that income of Turkish people who were attending school was 14% higher than the income of Turkish people who did not attend school with benefited most to female. If the level of Turkish people education have a positive impact on people's income, how do the level of Indonesian people education, will it increase the level of Indonesian people’s income? This question will be answered through this study. Therefore this study is important because it will answer questions about the education of the Indonesian people whether it will increase the Indonesian people’s income or not. The purpose of this study is to find out whether the education level of the Indonesian people has a positive effect on the income of the Indonesian people. The potential contribution of this study is information about: (a) whether the education level of the Indonesian people is positive for the income of the Indonesian people, (b) the types of main works/main industry sector that has the highest average monthly per capita income, (c) main employment status that has the highest average per capita income per month, (d) which is higher whether the income of the Indonesian people in urban or in rural areas, and (e) which is higher whether the income of the Indonesian people of male or female. This study uses a descriptive method with data consisting of March 2018 Susenas data obtained from BPS Indonesia. The data is processed with software Stata 13. Per capita income is proxied by the expenditure per capita because in the March 2018 Susenas data there is no data on per capita income. The results of this study are that: (a) the level of education of the Indonesian people has a positive effect on the income of Indonesian people where the higher the level of school certificate they have, the higher the average per capita income per month, (b) people with S3 certificates have the highest average per capita income per month which is IDR4,785,491.00, followed by people with S2 certificates of IDR3,609,383.09, people with SMA LB (disable high school) certificates of IDR2,267,607.10, people with S1 certificates of IDR2,251,427.65, and people with D4 certificates of Rp.2,172,904.17, (c) people with MI (Madrasah Ibtidaiyah) certificates have the lowest average per capita income per month, which is IDR822,752.04, then people with MTs (Madrasah Tsanawiyah) certificates in the amount of IDR885,751.88, people with Package B certificates of IDR904,163.85, people with Package A certificates of IDR916,094.67, and people with SD (Primary School) certificates of IDR918,009.81, (d) based on the types of main works/main industry sector, the types of main works/main industry sector in the form of Professional, Scientific, and Technical Activity has the highest average per capita income per month which is IDR2,212,791.64, followed by the types of main works/main industry sector in the form of Real Estate of IDR2,110,985.48, the types of main works/main industry sector in the form of Financial and Insurance Activities in the amount of IDR2,075,870.22, the types of main works/main industry sector in the form of International Agency Activities and Other International Extra-Agency amounting to IDR2,003,836.54, and the types of main works/main industry sector in the form of Information and Communication amounting to IDR1,880,276.79, (e) the types of main works/main industry sector in the form of Paddy and Secondary Crops Agriculture has the smallest average per capita income per month which is IDR708,201.10.00, followed by the types of main works/main industry sector in the form of Animal Husbandry is IDR768,752.73, the types of main works/main industry sector in the form of Horticulture is IDR772,500.77, the types of main works/main industry sector in the form of Forestry and Other Agriculture in the amount of IDR778,825.61, and the types of main works/main industry sector in the form of Plantation is IDR832,557.85, (f) based on status/position in the main job or main employment status, main employment status of Own Workers with Permanent/Paid Workers have the highest average per capita income per month which is equal to IDR1,657,233.99 and the lowest is Free Workers which is equal to IDR760,343.09, (g) based on location and gender, men in urban areas has the highest average per capita income per month which is equal to IDR1,352,472.77 and women in rural areas have the lowest average per capita income per month which is IDR844,328.18. This study concludes that: (a) the level of education of the Indonesian people has a positive effect on the income of Indonesian people where the higher the level of school certificate they have, the higher the average per capita income per month, (b) the lowest average per capita income per month is in the types of main works/main industry sector in the form of Paddy and Secondary Crop Agriculture, in the main employment status in the form of Free Workers, and in women in rural areas. This study recommends that the government make policies and actions to increase the level of education of the Indonesian people so that the average per capita income per month of the Indonesian people increases. Actions to improve the education level of the Indonesian people are aimed primarily at people who work in the types of main works/main industry sector in the form of Paddy and Secondary Crops Agriculture, with the status/position in the main job in the form of Free Workers, and female sex who live or work in rural.