Working Paper in Economics and Development Studies
Department of EconomicsPadjadjaran University
Complementary Policies to Increase Poor People’s Access to Higher Education: The Case of West Java, Indonesia
Mohamad FahmiAchmad Maulana
No. 201301
Center for Economics and Development Studies,Department of Economics, Padjadjaran UniversityJalan Cimandiri no. 6, Bandung, Indonesia. Phone/Fax: +62-22-4204510http://www.ceds.fe.unpad.ac.id
For more titles on this series, visit:http://econpapers.repec.org/paper/unpwpaper/
Achmad MaulanaArief Anshory Yusuf
(Center for Economics and Development Studies CEDS)
Januari, 2013
31/12/2012
Complementary Policies to Increase
Poor People’s Access to Higher
Education: the Case of West Java,
Indonesia
Mohamad Fahmi, Achmad Maulana, and Arief A Yusuf
CEDS - Universitas Padjadjaran, INDONESIA
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Complementary Policies to Increase Poor People’s Access to Higher Education: the Case of West Java, Indonesia
ABSTRACT
We see a weakness of the merit-based government scholarship program for students from
poor families, Bidik Misi, as most of them fail to meet the minimum academic requirement.
This paper provide a policy simulation that compares two programs, private tutoring
voucher (PTV) and conditional cash transfer (CCT), to complement the Bidik Misi
scholarship to boost the number of poor students to get the support. To this end, we offer a
policy targeted for second and third year high school students at public schools. The data
sources that we used in this study are the Indonesia Family Life Survey (IFLS), the
Indonesia Social and Economic Survey (SUSENAS), and some primary data. To choose the
best alternatives, we compare the cost effectiveness of both program and we find that the
cost effectiveness per student in private tutoring voucher (PTV) is lower than conditional
cash transfer program. The PTV program is also more convincing than CCT as PTV could
directly influence the quality of instruction. We also check the robustness of the scenario
using two one way sensitivity analyses. The sensitivity analyses support our finding that
PTV program has more cost effective than the CCT.
JEL CODES: I24, I28
KEYWORDS: Policy Simulation, Cost Effectiveness Analysis, Sensitivity Analysis, Private
Tutoring Voucher, Conditional Cash Transfer.
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Complementary Policies to Increase Poor People’s Access to Higher Education: the Case of West Java, Indonesia
INTRODUCTION AND BACKGROUND
The World Bank, in 2010, reported that regional disparities of higher education in
Indonesia have been narrowing in past years. However, the accessibility of rich and poor to
access tertiary education is far from ideal. Less than 2% of youth aged 19-24 from
households of the lowest wealth quintile are enrolled in tertiary education institution
compare to 60% of the wealthiest household.
West Java as one of the most populous provinces in Indonesia is located in Java Island and
also the closest province to Jakarta Region. In 2009, it is only about 1.1 percent of poor
young people who live in urban area can access higher education, or only 3,179. One of the
rationale of low participation in higher education, is the high cost of education, either
directly or indirectly so most of the people, especially the poor, unable to access higher
education. Even though most of the universities are concentrated in urban areas, the poor
urban people still have limited access to universities. On the other hand, the dropout rate in
West Java in 2009/2010 is quite low or 2.87 percents. This dropout rate is lower than most
of other provinces and Indonesian average level that reached 3.27 percents. Hence,
dropout may not be the important factor of the low participation rate in higher education
in West Java.
To tackle the low participation of student from poor household in higher education, the
Government of Indonesia (GOI) and the private sectors have introduced several schemes of
scholarships. There are two main categories of scholarships available for student in higher
education; they are full and partial scholarships. Up until 2009, the full-scholarship scheme
is only provided by a few agencies from private companies and philanthropic foundations.
This scholarship conditions the awardees to have excellent academic achievement while
most scholarship for student from financially disadvantage students is partial scholarship.
In 2008 GOI introduced two scholarship schemes; the Improved Academic Achievement
scholarship (PPA) and the Student Learning Assistance scholarship (BBM). PPA is given to
university students who have excellent academic performance, while BBM is given to
university students who come from low SES background family. Until 2011, both schemes
have been given to about 240,000 university students. However, the amount of funds
provided is still not sufficient to cover educational and living expenses. Hence, many
students from poor family background did not finish their undergraduate education simply
because they didn’t have enough money to cover those expenses.
Additionally, GOI introduced Bidik Misi program in 2010. Bidik Misi is a scholarships
program that provides opportunities for poor students to access public universities. The
scholarship provided in this program consists of the cost of living assistance given to
students of at least Rp 600,000 (six hundred thousand rupiah) per month and tuition fees
Rp 2,400,000 (two million four hundred thousand rupiah) per semester. In 2010, GOI has
been given the scholarship to 19,675 and it was increased to 30,000 recipients in 2011. The
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Complementary Policies to Increase Poor People’s Access to Higher Education: the Case of West Java, Indonesia
Bidikmisi Scholarships are given to students who study at 117 public colleges and
universities. In 2012, GOI continue to award the Bidikmisi scholarship to about 30,000
students.
There are two paths if a poor student wants to have a Bidik Misi Scholarship. The first path
is the national entrance examination path. In the entrance examination path, students have
to meet a certain grade on national or a public university entrance examination if they want
to get the scholarship. They also have to be among the best 30 in their senior high school at
semester 4 and 5. The second path is a talent scouting scheme. By this scheme academically
talented students are invited by the public universities to study there without test. They
also have to maintain their academic performance in semester 3, 4, and 5 in senior high
school. For example, if a student studies in a “B” grade school then they have to be among
the best 30 in their school to be eligible to get the scholarship.
Despite Bidik Misi program is a good incentive for poor students to access public university,
most of them are fail to meet the minimum academic requirement as students from high
socio economic status background outperform the students from poor family in high school
and in public university entrance examination.
This policy simulation proposes two alternatives to complement the Bidik Misi scholarship
to increase the number of poor students who eligible to get the scholarship. Those
alternatives are private tutoring voucher and conditional cash transfer.
LITERATURE REVIEW
In response to rapid demand in higher education, many governments introduce cost
sharing instead of free tuition fees to increase the capacity and quality of their higher
education. On the other hand, they are also providing financial assistance to create more
opportunities for young talented student from poor and rural areas to enroll in
universities.
The most visible barrier for young people from poor and rural areas to access higher
education is their inability to pay tuition fees and cover the living costs and other fees.
Their low family income background also correlates with other the other barrier to access
of higher education, such as such as completion in secondary school, rural or remote
location, ethnic or linguistic minority status, and higher educational aspiration. In many
countries for many years, admission and financial assistance to enroll to universities public
universities was based mainly on academic merit. University attendance and also merit-
based financial assistance is received by young people from middle and upper-income
families. People from low income families or rural areas, often have low performance in
admission test as they graduated from poorer quality secondary school. However, Bloom
and Rosovsky (2006) argues that merit based criteria cannot be relaxed as giving access to
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Complementary Policies to Increase Poor People’s Access to Higher Education: the Case of West Java, Indonesia
people who do not deserve them cannot be in public interest. They believe a strategy that
attract people from low income families as well as provide a sufficient funding will be the
answer to the problem.
To help students financing post-secondary education, many countries typically provide two
types of financial aid; merit-based aid and need-based aid. Merit-based aid or scholarships
is awarded for those who have outstanding academic achievement, special talent or
leadership capabilities. Need-based financial aid is given for those who lack of funding to
pay tuition fees, education and living cost to attend universities. In Canada, need-based is
consist of student loans, grants, loan remission payments Berger and Baldwin (2009). Most
of students loans are offered with interest-free when the student still in university. Student
loan is one of the costs sharing policy to reduce government subsidies to students and their
families. These days, students are pushed to take students loans and use their own money
to finance their study rather than grant and scholarships (Campaigne and Hossler 1998;
Reimers, Da Silva et al. 2006; Fahmi 2007). According to Monks (2009), most recent studies
generally concluded that grant is the most Important financial aid to help student to attend
university followed by loans and work-study. In addition, several studies, for example
Avery and Hoxby (2007) finds that merit-based aid has a bigger impact on increasing
enrollment probabilities than need-based aid. In some countries, where many students are
still living with their parents, government provides indirect assistance to parents in the
form of income tax. However, this government support is criticized because it is difficult
define the outcome of the assistance and some parents do not always transfer the benefit to
their children (Fahmi 2011).
Another form of government intervention in increasing higher education participation by
poor students is private tutoring. According to Dang and Rogers (2008) policy maker
around the world have different position on private tutoring. Some countries, such as
Cambodia, Korea, Mauritius, and Myanmar, are banned the practice (Bray 1999). On the
other hand, some other countries are ignore and even support it (Dang and Rogers 2008).
One of the country that formally support the private tutoring is Israel (Lavy and Schlosser
2005). Since 1999, Israel conducted a remedial education program for underperforming
high-school students. The objective of the program was to increase the number of students
who can access higher education. Using a difference-indifference method Lavy and
Schlosser (2005) find that the private tutoring program in Israel increased the probability
of participating students finish their high school by 12 percents.
The last form of the government intervention in education that used by some countries is
the conditional cash transfer scheme. According to Rawling and Rubio (2009) the
conditional cash transfer is a modern social assistance program that has three key design:
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Complementary Policies to Increase Poor People’s Access to Higher Education: the Case of West Java, Indonesia
“First, they provide grants directly to poor households, thereby changing accountability
relationships among the national government, service providers, and the poor. Second,
they seek to exploit complementarities between elements of human capital development
through their inclusion of health, nutrition, and education components. Third, the use of
cash is promoted as efficient and flexible”.
An education conditional cash transfers are given to students, from elementary to senior
high school, with the some conditions. The conditions usually school enrollment and school
attendance. In some countries (Honduras, Mexico, and Turkey) the education grant covers
direct education cost and opportunity cost sending children to school rather than work
(Fahmi 2009).
Rawling and Rubio (2005) found that, in Mexico, Nicaragua, and Colombia, conditional cash
transfer programs have a positive effect on education outcome. In Mexico, primary school
enrollment rates increase from 0.74 to 1.07 percentage points for boys and it increase from
0.96 to 1.45 percentage points for girls. In Nicaragua, CCT program increased the average
primary school enrollment rates by nearly 22 percentage points. In Colombia, the CCT
program had no effect on primary school enrollment rates while it boosts the secondary
school enrollment rates by 5.5 and 14 percentage points in rural areas and urban areas,
respectively. However, Rawling and Rubio (2005) found that the impact of CCT programs
on attendance is mixed. In Nicaragua, the CCT program has a larger impact on attendance
than on enrollment rates. On the other hand, in Mexico the CCT program has larger impact
on enrollment than attendance.
In Indonesia, one of the earliest forms of CCT that has been implemented is the Indonesian
school scholarship and grant program (Jaring Pengamanan Sosial or JPS). This CCT
program provided scholarships and block grants to both students and schools. The JPS was
implemented in 1998/1999 as a response to the economic crisis and was funded for three
years (Cameron, 2002). The main objective of the program was to offset threats to
enrolment rates among poor children in the period of economic crisis. The GOI believes
that the program could discourage poor families to withdraw their children from school in
order to put them in the labor market to supplement household income. Implicitly, the
scholarships may replace or compensate the opportunity cost of sending children to school
(Reimers, Da Silva et al. 2006). Cameron (2002) found that the scholarships are effective to
reduce the dropout rate in lower secondary education by about 3 percentage points.
However the program had no impact on dropout rate in primary and upper secondary
education.
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Complementary Policies to Increase Poor People’s Access to Higher Education: the Case of West Java, Indonesia
POLICY GOAL AND ALTERNATIVES
The total quota of bidik misi scholarship in 2012 is 30,000 seats, whereas 2,400 of them are
available for poor students in West Java Province. However, in 2010, it is estimated that
only 1,848 or 77 percents seats are claimed by poor students from West Java. The 23
percent of total quota, or 552, are taken by non poor students. Those seats were not
claimed by poor students as they could not pass the national entrance or fulfill the
minimum academic requirement to attend public universities. It is estimated from 552
unclaimed seats there are about 380 seats were not claimed by poor students from urban
area.
The goal of this policy simulation is to provide a complementary policy of Bidik Misi
Program to increase public universities attendance, by poor students, particularly who
come from urban area, in 2013. To increase the probability of urban poor students in
accessing public universities, we offer two following policy alternatives: Private Tutoring
Voucher and Conditional Cash Transfers.
PRIVATE TUTORING VOUCHER
According to Dang and Rogers (2008):
“Private tutoring is a fee-based tutoring that provides supplementary instruction to
children in academic subjects they study in the mainstream education system.”
One of the most important factor that high SES outperform the low SES (poor) students in
entrance examination test is high SES students most likely participate in private tutoring as
their parent have more money to pay the fees.
To overcome this gap the GOI could offer a private tutoring voucher. With this option, the
GOI provides the vouchers to pay private tutoring program for urban poor students who
include in the best 30 in their school. Students and their families cannot exchange and
Non Poor
552
(23%)
Rural
31%Urban
69%
Poor
1,848 (77%)
Graph 1 Composition of Bidik Misi Grantee in West Java 2010
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Complementary Policies to Increase Poor People’s Access to Higher Education: the Case of West Java, Indonesia
trade their voucher to anyone else. The best 30 poor students from urban area could get
the 1 year voucher from semester 5 or the first semester of their third year in high school.
CONDITIONAL CASH TRANSFER (CCT)
According to World Bank (2009), conditional cash transfers (CCTs) are
“..programs that transfer cash, generally to poor households, on the condition that those
households make prespecified investments in the human capital of their children.”
According to Reimers, Da Silva et al. (2006), there are theories that relate conditional cash
transfer to school enrolment, attendance , and attainment. CCT is seen as incentives and
mechanism to ensure that parents send their children to school, instead of working for
their family. These theories assume that students who attend school will have better
academics performance than those who are not in school. These theories regard school as a
“black box” as the cash transfer could affect the educational outcome without intervening
in quality of education or school infrastructures.
With the CCT scheme, the Government of West Java will provides conditional cash transfer
to urban poor family who has a high school student that include in the best 30 in their
school. With this conditional cash transfer, students who are in between the best 30
percents of their school are expected to stay at school and maintain their academic rank in
their schools.
The mechanism of this scheme is illustrated as follows. The poor students who have good
academic performance and include in the 30 in their school are identified by the provincial
government through its local educational office in urban area.
The conditional cash transfer is provided for urban poor household for three semesters,
from semester 4 to 6.
DATA AND METHODOLOGY
There are two data sources that we used in this study, that are the Indonesia Family Life
Survey (IFLS), a longitudinal household survey that started in 1993, and the National
Socioeconomic Survey. Specifically, we use the last wave of IFLS data that covered
approximately 13,000 households scattered in 13 provinces1 and 2009 Indonesia Social
and Economic Survey (SUSENAS), a nationwide survey served as source of monitoring
1 There are currently three full follow-up waves of IFLS that were conducted in 1997, 2000, and 2007. The first
round of IFLS covered approximately 7,200 households in 27 provinces. In the last wave, the number of household
interviewed grew to 13,000 households. The household attrition is quite low, estimated around 5 percent
households are lost between waves.
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Complementary Policies to Increase Poor People’s Access to Higher Education: the Case of West Java, Indonesia
social and economic progress in the Indonesian households. There are two sections of data
in 2009 SUSENAS data, the regular (core) and the module. In 2009, the module contains
elaborate information on social life, culture and education. The sample size for this 2009
data consisted of more than 290,000 households. While IFLS only covers 13 provinces,
SUSENAS covers all provinces in Indonesia.
Our main objective of this paper is to find out what are the complementary policy
alternatives that government can use as to increase urban poor participation in tertiary
education. To this end, we offer a policy targeted for second and third year high school
students at public schools.
In calculating an estimated cost for this, we need a reliable estimate on how much poor
students are actually enroll in the public senior secondary school. We use 2009 SUSENAS
education module to calculate the number of students. To find the number of students, we
employ the following steps. We started by combining households in the core SUSENAS and
individuals information from the module SUSENAS as these recorded important
information; households’ expenditures and educational participation, respectively. Next,
we limit our sample into individuals who live in West Java. We classified them into two
groups using a question stipulated in the survey that asked whether the households receive
conditional cash transfer from the government or not, poor and non-poor. Simultaneously,
we extracted individuals below the age of 16 and above 18 years old who were either not
yet attend and those already leave schools. From this step, we get a proxy for individuals
who were active in senior secondary schools. We then classify them into type of school
providers and then keep individuals who were in the second grade. We found that a pupil is
either attends senior secondary schools under coordination of Ministry of Education
(MONE) or Ministry of Religious Affairs (MORA) or private providers. The last step was
dropping individuals that attended private providers and grouped to two groups; poor and
non-poor.
Table 1 shows the number of observations that survived during each step of the above
process. After dropping individuals who are not meet our criteria, the final sample consists
of 228 individuals that equivalent with 126,558 West Java pupils in second grade senior
secondary schools and 18,750 of them came from poor households.
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Complementary Policies to Increase Poor People’s Access to Higher Education: the Case of West Java, Indonesia
Table 1 Sample Construction
Step Sample Sample with weight
1 Integration between core and module
# Number of households from core 291,753 58,255,544
# Individuals 1,155,566 230,868,429
2 Of which live in West Java 78,278 41,902,385
3 Defining the poor
a Of which grouped into Conditional Cash transfer criteria
# Individuals classified as non poor 61,748 33,107,501
# classified as poor 16,530 8,794,884
B Of which between 15 and 19
(i). Not yet attend school 24 11,814
(ii). In school 4,470 2,440,094
(iii). leave school 5,211 2,774,420
4 Of which attend 2 grade in senior secondary
(i). MONE 167 93,140
(ii). MORA 44 25,580
(iii). Other MONE 17 7,838
(iv). Private 136 74,108
5 Of which attended public schools
Non poor 196 107,808
Poor 32 18,750
Total Sample 126,558
Source: authors’ calculation from 2009 SUSENAS.
Our next step is to find students that come from poor household who have a good academic
standing. As the SUSENAS data does not have any questions in their questionnaire that
could act as variable to represent this, we decided to use wave 3 of the IFLS data. We
classify a student in a good academic standing if he or she is on the 70th percentile or above,
by using his or her junior secondary national exam score held in year of 2007.
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Complementary Policies to Increase Poor People’s Access to Higher Education: the Case of West Java, Indonesia
Table 2
Target population West Java
Number of Senior High School students of second grade (2009) 126,558
Percentage coming from 'poor' families 14.82%
Number of Senior High School students of second grade coming from 'poor' families 18,750
Percentage belonging to 30% best in his/her school 7%
Number of Senior High School students of second grade coming from 'poor' families and the
best 30
1,294
RESULTS
PRIVATE TUTORING VOUCHER
As we mentioned in the Goal and Policy Alternative section, there will be about 380 seats of
Bidik Misi quota were not claimed by the urban poor in 2013. We assume that there is no
significant change from year of 2011 to year 2013 in the proportion of rich-poor students
who get the bidik misi scholarships.
What is the estimated success rate of the private tutoring program in West Java?
Universitas Padjadjaran (UNPAD) has a Corporate Social Responsibility (CSR) program that
provide a free test preparation program for high school graduates in surrounding area of
UNPAD’s campus in Jatinangor. Jatinangor in last 20 years has developed as a new urban
area in West Java. According to UNPAD’s CSR team, the probability of participants of the
program to pass the national entrance test is about 40%. With this probability rate, we
need to train about 950 urban poor students to secure 380 seats in public universities.
It needs only about 50 classes (1 class for 20 students) to train 950 students in private
tutoring program. According to www.info kursus.net, there are 203 private tutorial
providers in West Java in 2009 and most of them are located in urban area. With this
number, there will be no problem for private tutorial providers as averagely there will five
new additional students sent to each provider.
The estimated voucher cost is about Rp. 7 million per year per person. This estimated cost
is calculated from the average price of private tutoring in urban area of West java. With this
voucher, students are expected both to have more preparation when they took the national
entrance test and to maintain their academic performance rank in the best 30% in their
school. The government will spend about 7 trillion rupiahs per year (or only about
0.0023% of West Java’s GDRP) to send 1000 students to private tutorial providers. As the
size of the spending is relatively small, the West Java Government is encouraged to bear the
cost.
After the intervention, we may expect that 40 percent of the urban poor students who
participate in private tutoring class or participant could pass the national exam test. This
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Complementary Policies to Increase Poor People’s Access to Higher Education: the Case of West Java, Indonesia
intervention could increase the number of urban poor students who can access public
universities by 380 in 2013 or it increase about 2.22%.
Table 3 Cost Effectiveness Private Tutoring Program
Item West Java
Number of Senior High School students of second grade (2009) 126,558
Percentage coming from 'poor' families 14.82%
Number of Senior High School students of second grade coming from 'poor' families 18,750
Percentage belonging to 30% best in his/her school 7%
Number of Senior High School students of second grade coming from 'poor' families and 30% best 1,294
Target: Number of unclaimed seats in bidik misi program by urban poor students 380
Success Rate of private tutoring program 40%
Number of potential urban poor students 950
Unit cost of sending into private tutoring for a year (Rp Million/student) 7.00
Total cost of sending into private tutoring (Rp Million) 6,650
Cost effectiveness per student (Rp Million) 17.50
CONDITIONAL CASH TRANSFER (CCT)
According to our estimation, the number of urban poor student who include in the best 30
in their school is only 7 percents or about 1000 students. The benefit structure is Rp.
500,000 per household per month for three semesters. The government will pay directly to
head of the family through local post office. The eligibility of students to get the CCT are
verify each semester. They have to maintain their enrollment and their position in the best
30 percents in their school to get CCT for the next semester. The total government
spending for this CCT is about 9 trillion rupiahs or about 0.003% of West Java’s GRDP. We
also propose to the Government of West Java to bear the cost as the total cost of CCT is
relatively small.
Table 4 Cost Effectiveness Conditional Cash Transfer
Item West Java
Number of Senior High School students of second grade (2009) 126,558
Percentage coming from 'poor' families 14.82%
Number of Senior High School students of second grade coming from 'poor' families 18,750
Percentage belonging to 30% best in his/her school 7%
Number of Senior High School students of second grade coming from 'poor' families and 30% best 1,294
Target: Number of unclaimed seats in bidik misi program by urban poor students 380
Success Rate of CCT program 40%
Number of potential urban poor students 950
Unit cost of CCT for 3 semester (Rp Million/student) 18.00
Total cost of CCT (Rp Million) 17,100
Cost effectiveness per student (Rp Million) 45.00
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Complementary Policies to Increase Poor People’s Access to Higher Education: the Case of West Java, Indonesia
DISCUSSION
From Table 3 and Table 4 in the results section, we could see that the cost effectiveness per
student in private tutoring voucher (PTV) is lower than conditional cash transfer program.
The cost effectiveness of PTV is 17.5 million rupiahs per students whereas the cost
effectiveness of CCT is 45 million rupiahs. The PTV program is also more convincing than
CCT as PTV could directly influence the quality of instruction. As we mentioned in the
previous section, CCT is expected to influence the enrolment without directly affect the
quality of instruction.
Beside the cost effectiveness, Dang and Roger (2008) believe there some secondary
positive effects of PTV. First, PTV could provide a more individualized and more flexible
delivery mechanism than public schools. Second, private tutoring increases efficiency and
welfare.
Dang and Roger (2008) suggests some certain reasonable assumptions that should be
taken when we test or check a scenario. First, market for private tutoring is perfect
competition and that students are free to choose whether to purchase private tutoring.
Second, market for private tutoring is perfect competition and the supply curve for public
schooling perfectly inelastic after a certain point.
SENSITIVITY ANALYSIS
We also conduct a cost-benefit sensitivity analysis as we compare some scenarios of benefit
and cost of PTV and CCT. We provide two one-way sensitivity analyses. The first sensitivity
analysis focuses on the adjustment of cost and effectiveness of the Private Tutoring
Voucher program. While, the second analysis focuses on the adjustment of cost and
effectiveness of the Conditional Cash Transfer program.
The first analysis is conducted for the following variations:
1. Sensitivity of PTV program to a decrease in the probable effectiveness value
(success rate) from 40% to 29%.
2. Sensitivity of PTV program to an increase in a unit cost per program (Rp
Million/student) from 7 to 12 million rupiahs.
3. Sensitivity of PTV program as a combination of a decrease in the probable
effectiveness value (success rate) from 40% to 29% and an increase in a unit
cost per program (Rp Million/student) from 7 to 12 million rupiahs.
On the other hand, the second analysis is conducted for the following variations:
1. Sensitivity of CCT program to an increase in the probable effectiveness value
(success rate) from 40% to 60%.
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Complementary Policies to Increase Poor People’s Access to Higher Education: the Case of West Java, Indonesia
2. Sensitivity of CCT program to a decrease in a unit cost per program (Rp
Million/student) from 18 to 12 million rupiahs.
3. Sensitivity of CCT program as a combination of a increase in the probable
effectiveness value (success rate) from 40% to 60% and a decrease in a unit cost
per program (Rp Million/student) from 18 to 12 million rupiahs.
Table 5 shows the result of the one-way sensitivity analysis of benefit-cost of PTV program
compares to the base case of CCT program.
In the first scenario, the decrease of success rate from 40% to 29% increases the total
spending of the program from 6,650 million rupiahs to 9,058 since the number of
participating students is increase from 950 to 1,294. In this scenario, the government will
include all the students from poor families who among in the best 30% in their schools. It is
assumed that the number of students who is accepted in public university is decrease to
about 29%. In the base case scenario of PTV, the government has to select only 950
students out of 1,294 as it assumed that the success rate is 40%. As a result, the cost
effectiveness increases from 18 to 24 million rupiahs per student. Even though the cost
effectiveness is increase to 24 million rupiahs per student, the cost effectiveness of PTV
program is still lower than the cost effectiveness of CCT program (40 million rupiahs per
student).
In the second scenario, an increase in a unit cost per program (Rp Million/student) from 7
to 12 million rupiahs increases the total spending of the program from 6,650 to 11,400
million rupiahs. As a result, the cost effectiveness increases from 18 to 30 million rupiahs
per student. Even though the cost effectiveness is increase to 30 million rupiahs per
student, the cost effectiveness of PTV program is still lower than the cost effectiveness of
base case CCT program (40 million rupiahs per student).
In the third scenario, the decrease of success rate from 40% to 29% and an increase in a
unit cost per program (Rp Million/student) from 7 to 12 million rupiahs increases the total
spending of the program from 6,650 to 15,528 million rupiahs. The third scenario is a
combination of the first and second scenarios. As a result, the cost effectiveness increases
from 18 to 41 million rupiahs per student. Even though the cost effectiveness is increase to
41 million rupiahs per student, the cost effectiveness of PTV program is still lower than the
cost effectiveness of CCT program (40 million rupiahs per student).
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Complementary Policies to Increase Poor People’s Access to Higher Education: the Case of West Java, Indonesia
Table 5 One-Way Sensitivity Analysis on the Adjustment of PTV Program
PTV CCT
Item Base Case Decrease
Effectiveness
Increase
Cost per
Student
Decrease
Effectiveness and
Increase Cost per
Student
Base Case
Number of Senior High
School students of
second grade (2009)
126,558 126,558 126,558 126,558 126,558
Percentage coming from
'poor' families
14.82% 14.82% 14.82% 14.82% 14.82%
Number of Senior High
School students of
second grade coming
from 'poor' families
18,750 18,750 18,750 18,750 18,750
Percentage belonging to
30% best in his/her
school
7% 7% 7% 7% 7%
Number of Senior High
School students of
second grade coming
from 'poor' families and
30% best
1,294 1,294 1,294 1,294 1,294
Target: Number of
unclaimed seats in bidik
misi program by urban
poor students
380 380 380 380 380
Success Rate 40% 29% 40% 29% 40%
Number of potential
urban poor students
950 1,294 950 1,294 950
Unit cost per program
(Rp Million/student)
7 7 12 12 18
Total cost (Rp Million) 6,650 9,058 11,400 15,528 17,100
Cost effectiveness per
student (Rp Million)
18 24 30 41 45
Table 6 shows the result of the one-way sensitivity analysis of benefit-cost of CCT program
compare to the base case of PTV program.
In the first scenario of CCT program, an increase in the probable effectiveness value
(success rate) from 40% to 60% decreases the total spending of the program from 17,100
to 11,400 million rupiahs since the number of participating students is decrease from 950
to 633 students. As a result, the cost effectiveness of CCT program decreases from 45 to 30
million rupiahs per student. Even though the cost effectiveness is decrease to 30 million
rupiahs per student, the cost effectiveness of CCT is still higher than the cost effectiveness
of the base case of PTV (18 million rupiahs per student).
Page | 15
Complementary Policies to Increase Poor People’s Access to Higher Education: the Case of West Java, Indonesia
Table 6 One-Way Sensitivity Analysis on the Adjustment of PTV Program
CCT PTV
Item Base Case Increase
Effectiveness
Decrease
Cost per
Student
Increase
Effectiveness and
Decrease Cost per
Student
Base Case
Number of Senior High
School students of
second grade (2009)
126,558 126,558 126,558 126,558 126,558
Percentage coming from
'poor' families
14.82% 14.82% 14.82% 14.82% 14.82%
Number of Senior High
School students of
second grade coming
from 'poor' families
18,750 18,750 18,750 18,750 18,750
Percentage belonging to
30% best in his/her
school
7% 7% 7% 7% 7%
Number of Senior High
School students of
second grade coming
from 'poor' families and
30% best
1,294 1,294 1,294 1,294 1,294
Target: Number of
unclaimed seats in bidik
misi program by urban
poor students
380 380 380 380 380
Success Rate 40% 60% 40% 60% 40%
Number of potential
urban poor students
950 633 950 633 950
Unit cost per program
(Rp Million/student)
18 18 12 12 7
Total cost (Rp Million) 17,100 11,400 11,400 7,600 6,650
Cost effectiveness per
student (Rp Million)
45 30 30 20 18
In the second scenario of CCT program, a decrease in a unit cost per student from 18 to 12
million rupiahs decreases the total spending of the program from 40% to 60% decreases
the total spending of the program from 17,100 to 11,400. This result is similar with the
first scenario of CCT as the cost effectiveness is decrease to 30 million rupiahs per student;
however, its cost effectiveness is still higher than the base case of PTV.
The third scenario of CCT is a combination of the first and the second scenarios as there is
an increase in the probable success rate from 40% to 60% and a decrease in a unit cost per
student from 18 to 12 million rupiahs. The total spending of the program is decrease
Page | 16
Complementary Policies to Increase Poor People’s Access to Higher Education: the Case of West Java, Indonesia
dramatically from 17,100 to 6,500 million rupiahs. As a result, the cost effectiveness
decreases from 45 to 20 million rupiahs per student. However, the cost effectiveness of the
“ambitious” third scenario of CCT program is still slightly lower than the cost effectiveness
of the base PTV program.
Both one-way analyses conclude that PTV program has lower cost effectiveness than CCT
and they strengthen the result of cost effectiveness comparison.
CONCLUSION
We see a weakness of the merit government scholarship program for students from poor
families, Bidik Misi as most of them are fail to meet the minimum academic requirement.
This paper provide a policy simulation that compares two alternatives, private tutoring
voucher (PTV) and conditional cash transfer (CCT), to complement the Bidik Misi
scholarship to boost the number of poor students who eligible to get the scholarship.
To choose the best alternatives, we compare the cost effectiveness of both program and we
find that the PTV program is cheaper than the CCT. We also check the robustness of the
scenario using two one way sensitivity analyses. The sensitivity analyses support our
finding that PTV program has lower cost effectiveness than the CCT.
If the Government of West Java accepts our proposal, then this policy will be the first
private tutoring intervention to increase higher education participation in Indonesia. We
believe that with the low cost effectiveness this policy will be applicable and effective to fill
the gap in bidik misi scholarship allocation.
There are some potential challenges for the implementation of the program. First, if the
number of urban poor students that is ranked among the 30 best in their school is more
than 950, then the government may have a problem to allocate the vouchers equally.
One of the possible methods to evaluate impact of private tutoring voucher in west java is
impact analysis. To collect the data, we could have an interview and conduct an individual
test to each treatment and control group, before and after the implementation.
Page | 17
Complementary Policies to Increase Poor People’s Access to Higher Education: the Case of West Java, Indonesia
BIBLIOGRAPHY
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Fahmi, M. (2009). The Effectiveness of Private Versus Public Schools in Indonesia:
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Fahmi, M. (2009). School choice and earnings: A case of indonesia, Department of
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Fahmi, M. (2011). "Does High School Economics Course Affect Learning in the University
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Page | 18
Complementary Policies to Increase Poor People’s Access to Higher Education: the Case of West Java, Indonesia
ANNEX 1 – UPDATED PBA
Education Total
2007 2008 2009 2010
Education total 14,295,606,229,67
4
15,777,654,445,72
5
13,080,731,119,66
0
20,207,993,523,79
3
Primary 3,041,790,675,025 6,468,998,879,061 819,476,211,779 4,261,172,804,089
Recurrent 2,344,130,555,386 5,509,090,267,484 413,960,995,770 3,932,554,367,851
Wages 78,123,215,142 97,801,729,444 91,496,080,141 3,573,755,916,368
Non-wages 2,266,007,340,244 5,411,288,538,040 322,464,915,629 358,798,451,483
Capital 697,660,119,639 959,908,611,577 405,515,216,009 328,618,436,238
Domestic 0 0 0 0
Donor 0 0 0 0
Secondary 771,404,490,255 605,766,062,838 419,811,222,381 618,451,412,883
Recurrent 693,558,674,475 527,700,159,007 354,902,462,306 557,070,697,507
Wages 287,452,931,778 440,831,685,199 39,802,533,969 355,518,239,769
Non-wages 406,105,742,697 86,868,473,808 315,099,928,337 201,552,457,738
Capital 77,845,815,780 78,065,903,831 64,908,760,075 61,380,715,376
Domestic 0 0 0 0
Donor 0 0 0 0
Tertiary 3,549,031,952,583 1,131,064,762,882 1,818,700,911,463 1,839,061,478,642
Recurrent 3,187,804,476,583 996,015,754,932 1,522,783,319,182 1,568,802,748,642
Wages 619,174,822,280 638,724,495,983 591,210,241,016 811,195,375,661
Non-wages 2,568,629,654,303 357,291,258,949 931,573,078,166 757,607,372,981
Capital 361,227,476,000 135,049,007,950 295,917,592,281 270,258,730,000
Domestic 0 0 0 0
Donor 0 0 0 0
Other Education 615,273,700,176 576,754,962,484 678,945,814,868 796,642,867,968
Recurrent 546,250,488,830 523,271,582,182 577,919,359,121 718,848,966,432
Wages 129,321,002,117 131,155,254,100 140,393,726,073 413,774,451,450
Non-wages 416,929,486,713 392,116,328,082 437,525,633,048 305,074,514,982
Capital 69,023,211,346 53,483,380,302 101,026,455,747 77,793,901,536
Domestic 0 0 0 0
Donor 0 0 0 0
Ministerial
REGIOADMINISTRATIO
N
6,318,105,411,635 6,995,069,778,460 9,343,796,959,169 12,692,664,960,21
1
Recurrent 6,286,403,259,621 6,940,294,693,763 9,309,236,819,099 12,637,633,718,12
6
Complementary Policies to Increase Poor People’s Access to Higher Education: the Case of West Java,
Education
2007
Wages 5,944,921,766,697
Non-wages 341,481,492,924
Capital 31,702,152,014
Domestic
Donor
49.38
41.97
8.66
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2007
Wages, non-wages and capital spending
WAGES
17.45
72.38
10.18
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2007
Wages, non-wages and capital spending by facility level
Wages
Complementary Policies to Increase Poor People’s Access to Higher Education: the Case of West Java,
Total
2007 2008 2009
5,944,921,766,697 6,800,566,747,702 4,661,726,859,776
341,481,492,924 139,727,946,061 4,647,509,959,323
31,702,152,014 54,775,084,697 34,560,140,070
0 0
0 0
51.40 42.23
87.69
40.48 50.87
8.38 8.12 6.90 3.92
2008 2009 2010
wages and capital spending - Education
NON-WAGES CAPITAL
56.47
32.5144.11
31.59
51.2241.20
11.94 16.27 14.70
2008 2009 2010
wages and capital spending by facility level – Tertiary
Wages Non-wages Capital
Page | 19
Complementary Policies to Increase Poor People’s Access to Higher Education: the Case of West Java, Indonesia
2010
4,661,726,859,776 12,566,463,755,65
9
4,647,509,959,323 71,169,962,467
34,560,140,070 55,031,242,085
0 0
0 0