Secondary vocational education and decent work in Indonesia: differences between urban and rural areas

ABSTRACT

Indonesia has prioritized upper secondary vocational education since 2006. This study examines the labour market outcomes of upper secondary vocational education in terms of decent work (DW), using Indonesian Family Life Survey data and a research framework that links DW into the broader labour economics of the school to work transition. We compare urban and rural workers with upper secondary vocational education to those with general education, using both simple regressions and propensity score matching. Workers with upper secondary vocational education do not earn higher wages or have better employment conditions than workers with general education. An exception is for workplace-provided training and pensions, where vocational graduates did better than general ones in 2014–15, a change from 2007; this effect was also much stronger in urban than in rural areas. Our findings raise questions about Indonesia’s policy of expanding upper secondary vocational education without also focusing on its quality.

KEYWORDS:

• Vocational education
• decent work
• propensity score matching method
• Indonesia

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. We define formal employment as working in the public sector or for a private company in the formal economy rather than in self-employment or working in the informal economy.

2. We also analyse the labour market outcomes in terms of DW aspects using 2007–2008 (IFLS4) data to see the differences between before and after the new vocational education policy.

3. The data include vocational junior high-school graduates; however, there were only 41 such individuals in our initial sample as it is unusual to choose vocational education at the junior secondary level in Indonesia. So, we dropped these 41 from the sample and focused on vocational education at the upper secondary level, as did government policy.

4. We have examined the interrelation among the indicators of DW, which could potentially introduce some bias into the estimation results. However, the correlations between these indicators are not strong, with correlation coefficients all below 0.46, as indicated by the explained variables in Appendix 1.

5. Since we are interested in upper secondary education, both general and vocational, that itself is affected by both primary and lower secondary education, we follow and use primary school as the reference group.

6. We only present the results of the PSM analysis using the 2007–08 IFLS4 data in Table 8, as there were significant differences in the results between IFLS4 and IFLS5. However, we also estimated the results of the OLS/probit model for our five decent work indicators, and the results for the IFLS4 data were similar to those for IFLS5.

Additional information

Funding

The work was supported by the Japan Society for the Promotion of Science [21K13319], [22K13416], [22H00079], and [21K13319].