The role of vocational education on unemployment in Indonesia

Abstract

In 2006, the Government of Indonesia began a national program of vocational high school expansion in Indonesia. Since then, the number of vocational high school graduates has been increasing significantly. The purpose of this study is to examine the role of vocational education on the probability of unemployment in developing countries using the case of Indonesia. We include demographic factors of age, squared age, gender, location of residence and marital status as control variables. This study uses cross-section data from the Indonesian National Labor Force Survey of August 2019. We restrict our sample to individuals with secondary high school as their highest education level. With binary dependent variable of unemployment status, we employ logit and probit estimation model in our estimation. The estimation results show that individuals with vocational education have a statistically significant lower probability of being unemployed contrasted to those individuals with non-vocational education. However, further analysis of the unemployment rates of vocational high school graduates by age shows that the case might not be applicable to recent graduates of vocational high school. Meanwhile, the control variables of age, age squared, gender, location of residence and marital status show the expected signs.

Keywords:

• Indonesia
• labor market
• secondary education
• unemployment
• vocational education

REVIEWING EDITOR:

• Arif H. Kabir, Deakin University School of Education, Australia

SUBJECTS:

• Education – Social Sciences
• Development Policy
• Education Policy

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Notes on contributors

Yoana

Yoana holds a Bachelor in Economics from the Department of Economics, Faculty of Economics and Business, Universitas Airlangga, Indonesia. Her research interest is development economics, particularly labour market issues in developing countries.

Ilmiawan Auwalin

Ilmiawan Auwalin is a lecturer and researcher at the Faculty of Economics and Business, Universitas Airlangga, Indonesia. He holds a Ph. D in Economics from the School of Economics, the University of Sydney, Australia. His research interests include economic development, labour market studies, and micro and small enterprises development and finance.

Rumayya

Rumayya is a full-time lecturer at Faculty of Economic and Business, Universitas Airlangga, Indonesia. He holds a Ph.D. in Economics from the University of Western Australia. His research interests include Development Economics and Political Economics.