Indonesia: Preparing Indonesian Youth for Transition Issues and Policy Agenda for Senior Secondary Education Human Development East Asia and Pacific Region BEC TF BASIC EDUCATION CAPACITY-TRUST FUND KEMENTERIAN PENDIDIKAN DAN KEBUDAYAAN THE WORLD BANK REPUBLIK INDONESIA THE WORLD BANK OFFICE JAKARTA Indonesia Stock Exchange Building, Tower II/12-13th Fl. Jl. Jend. Sudirman Kav. 52-53 Jakarta 12910 Tel: (6221) 5299-3000 Fax: (6221) 5299-3111 Printed in December 2012 Preparing Indonesia Youth for Transition: Issues and Policy Agenda for Senior Secondary Education is a product of staff of the World Bank. The findings, interpretation and conclusion expressed herein do not necessarily reflect the views of the Board of Executive Directors of the World Bank or the government they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denomination and other information shown on any map in this work do not imply any judgment on the part of the World Bank concerning the legal status of any territory or the endorsement of acceptance of such boundaries Cover Photo by: Marbawi Report No. 73763-ID Indonesia: Preparing Indonesian Youth for Transition Issues and Policy Agenda for Senior Secondary Education Human Development East Asia and Pacific Region Acknowledgments The team is grateful to officials and staff in the Ministry of National Education for their overall support of this study. This report also benefited greatly from the inputs and comments by the participants at the presentation session led by Ms. Nina Sardjunani, Deputy Minister for Human Resources and Cultural Affairs, National Planning Agency, the Government of Indonesia. It should be noted that while inputs of various officials have been incor- porated into the report, the policy recommendations in this document do not necessarily reflect the policies of the Government of Indonesia, the Government of the Kingdom of the Netherlands or the European Union. The report is prepared by a team comprises of Dandan Chen (Task Team Leader, Senior Economist, Human De- velopment Sector Department, East Asia and Pacific Region (EASHE), World Bank); Siwage Negara (Operations Officer, EASHE) and Imam Setiawan (Research Analyst, EASHE). Pedro Cerdan-Infantes (Economist, EASHE) made important contributions. Peer reviewers were: Ernesto Cuadra; (Lead Education Specialist, MNSHE), John Giles (Senior Economist, DECHE) and Halsey Rogers (Lead Economist, HDNED). The production of this report was made possible through the generous support of the Basic Education Capacity Trust Fund, supported jointly by the European Union and the Government of the Kingdom of the Netherlands. iv Preparing Indonesian Youth for Transition List of Abbreviations APBN State Budget (Anggaran Pendapatan Belanja Negara) BAN National Accreditation Board (Badan Akreditasi Nasional) BOP School Operational Grant from local government (Bantuan Operasional Pendidikan) BOS School Operations Grant from central government (Bantuan Operasional Sekolah) BSNP National Education Standard Agency (Badan Standar Nasional Pendidikan) D1, 2, 3, 4 Post-secondary diploma (1-year), (2-year), (3-year), (4-year) Ebtanas National Final Learning Evaluation (Evaluasi Belajar Tahap Akhir Nasional) GER Gross Enrollment Ratio IFLS Indonesia Family Life Survey KTSP Education Unit Level Curriculum (Kurikulum Tingkat Satuan Pendidikan) MI Islamic Primary School (Madrasah Ibtidaiyah) MoNE Ministry of National Education MSS Minimum Service Standard MT Islamic Junior Secondary School (Madrasah Tsanawiyah) OECD Organization for Economic Cooperation and Development OLS Ordinary Least Squares PISA Programme for International Student Assessment PSP Education Statistics Center (Pusat Statistik Pendidikan) SMA General Senior Secondary School (Sekolah Menengah Atas) SMK Vocational Senior Secondary School (Sekolah Menengah Kejuruan) SMP Junior Secondary School (Sekolah Menengah Pertama) SAKERNAS National Labor Force Survey (Survei Angkatan Kerja Nasional) SUSENAS National Household Socioeconomic Survey (Survei Sosial Ekonomi Nasional) TIMSS Trends in International Mathematics and Science Study Issues and Policy Agenda for Senior Secondary Education v Table of Contents Acknowledgments iv List of Abbreviations v Table of Contents vi Executive Summary viii Preparing Indonesian Youth for Transition: Framework and Context 2 A. Managing Senior Secondary Education as Preparing Indonesian Youth for Transition 2 B. Country and Sector Context 3 How Well Does Senior Secondary Education Prepare Youth for Transition: Outcome, Access, and Equity 14 A. Outcomes of Senior Secondary Graduates 14 B. Equitable Access to Senior Secondary Education 19 Are Schools Prepared? School Inputs, Resources, and Governance 30 A. Teachers 30 B. Textbooks 34 C. School Infrastructure 35 D. Curriculum 36 E. School Financial Resource 37 Is The System Prepared? Governance and Financing 40 A. Governance 40 B. Financing 45 Towards Better Preparing Indonesian Youth for Transition 50 A. Main Findings 50 B. Policy Implications 50 References 54 Appendix: Summary Description Of Reading, Math, and Science Proficiency in Pisa 56 Tables Table 2.1. OLS results: total senior secondary education GER 20 Table 2.2. OLS of Provincial SMK GER 23 Table 3.1. Conditions of classrooms and sanitary facilities at schools (%) 35 Table 4.1. Draft minimum standards for senior secondary education 41 Table 5.1. Strengthening quality assurance system 52 Figures Figure E1. Age distribution of Indonesian population, 1990 and 2010 viii Figure E2. Marginal rates of returns to education ix Figure E3. A framework for sector assessment x Figure E4. Senior secondary GER by income quintile xi Figure E5. Working hours: teaching and 2nd job xii Figure E6. Public current expenditure on secondary education per pupil xiv Figure E7. Household expenditure on senior secondary education as % of total household expenditure, by income quintile xiv Figure 1.1. Senior secondary education as transition: GER by level of education 2 Figure 1.2. A framework for sector assessment 3 Figure 1.3. Education attainment of adult population age 25-64 4 Figure 1.4. Education system in Indonesia 5 vi Preparing Indonesian Youth for Transition Figure 1.5. Comparison of population structure, 2010 6 Figure 1.6. Indonesia’s demographic change, 1990-2010 7 Figure 1.7. Job profile change between 2001 and 2009 8 Figure 1.8. Trend of gross enrolment ratio, by education level 8 Figure 1.9. Senior secondary GER by GDP per capita, international comparisons 9 Figure 1.10. Distribution of years of compulsory education, OECD and Asian countries 9 Figure 1.11. Enrollment share of SMK 10 Figure 1.12. Returns to education by level, 2001-2009 10 Figure 1.13. Education attainment by income quintile (2009) 11 Figure 1.14. Share of types of senior secondary education providers 12 Figure 2.1. Share of graduates continuing to tertiary education 14 Figure 2.2. Unemployment and formal sector employment, by education level 15 Figure 2.3. Hourly wage rate by household head’s education 15 Figure 2.4. Outcome of SMA and SMK graduates 16 Figure 2.5. Indonesian Grade 10 student performance in PISA 2009 17 Figure 2.6. Performance of Indonesian students in international assessment 17 Figure 2.7. National test scores by SMK/SMA entrants and graduates 18 Figure 2.8. National test scores by public/private school entrants and graduates 18 Figure 2.9. Enrollment increase 2004-2009 19 Figure 2.10. Regional Disparities in senior secondary school GER (2009), by school type 20 Figure 2.11. Sr. secondary GER vs Jr. Secondary GER, by province 21 Figure 2.12. Sr. secondary school GER, 2006 vs 2009 21 Figure 2.13. SMK and SMA GER: 2006 vs. 2009, provincial data 22 Figure 2.14. SMA/SMK composition by province 23 Figure 2.15. Urban/rural and income divide in sr. secondary education GER 24 Figure 2.16. Increase of the number of schools (2004-2009) 25 Figure 2.17. % of the most-mentioned sr. secondary schools by household 25 Figure 2.18. How far from home to attend a senior secondary school 26 Figure 2.19. Application/admission ratio, 2004-2009 26 Figure 2.20. 2008/09 application/admission ratio, by province 27 Figure 3.1. Student-teacher ratio and class size, by school type 31 Figure 3.2. Principal and teacher qualification 31 Figure 3.3. Years of teaching by school type 32 Figure 3.4. Percentage of teachers with 2nd job, and type of 2nd job 32 Figure 3.5. Working hours: teaching and 2nd job 33 Figure 3.6. Teacher monthly income from teaching and 2nd job 34 Figure 3.7. Source of textbooks 34 Figure 3.8. Percentage of schools with labs, by subject 35 Figure 3.9. Curriculum in senior secondary schools 36 Figure 3.10. School level spending per student per year 37 Figure 4.1. Decision-making on school management 43 Figure 4.2. 2009 PISA reading score by governance characteristics 44 Figure 4.3. Public current expenditure on secondary education per pupil 45 Figure 4.4. Senior secondary school monthly salary 46 Figure 4.5. Household expenditure per sr. secondary school pupil per year 47 Figure 4.6. Household expenditure on senior secondary education as % of total household expenditure, by income quintile 48 Boxes: Box 2.1: Previous studies of vocational school 24 Box 5.1: Training and further education in Australia 52 Issues and Policy Agenda for Senior Secondary Education vii Executive Summary Senior secondary education has become of increasing importance, as most countries throughout the world have achieved universal primary education and many are well on their way towards completion of 9-year basic education or more. Indonesia is no exception to these trends and has set the goal of expanding senior secondary education most recently. Reaching this goal is not without critical challenges. In the past, senior secondary schools were de- signed largely to prepare elites for advanced study. Today, in contrast, they enroll a majority of the youth population in Indonesia. They are the last stage of education to do so, with around 60 percent of young Indonesians going through senior secondary education, compared with only 20 percent going through tertiary education. One out of three senior secondary graduates further advances to tertiary education, while the other two enter the labor market directly. Senior secondary education is therefore a key stage of transition to future pathways to fulfill the potentials of the youth. In this context, Indonesia’s senior secondary schools today represent the last stage in the formal schooling system whose key objective is to ensure that young Indonesians leave education with at least the minimum qualifications required for employability and for further education and training. Most recently, the Government of Indonesia unveiled plans to increase compulsory education to 12 years. Rec- ognizing the uneven progress in achieving universal 9-year basic education, the stepping up efforts to introduce compulsory 12-year education for all Indonesian children will start with initial pilot programs in selected regions and roll out nationwide by 2014. This will be the third extension of compulsory education in the past three decades. The shift of attention and investment priority towards improving education quality and expanding ac- cess to the higher levels of learning is in part a response to the soaring demand for places in senior secondary education as the number of graduates from basic education increases rapidly. But it also reflects the belief that successful participation in the global economy requires skilled people, as production and trade patterns have become more complex than at any other time in the past. Broadening access to secondary education is thus not only a response to social pressure, but also an economic imperative. Figure E1. Age distribution of Indonesian population, 1990 and 2010 100 + 95 - 99 90 - 94 85 - 89 80 - 84 75 - 79 70 - 74 65 - 69 60 - 64 55 - 59 Age 50 - 54 (years) 45 - 49 40 - 44 35 - 39 30 - 34 25 - 29 20 - 24 15 - 19 10 - 14 5-9 0-4 12 10 8 6 4 2 0 2 4 6 8 10 12 Population (million) Male 1990 Male 2010 Female 1990 Female 2010 Source: Indonesia Bureaus of Statistics viii Preparing Indonesian Youth for Transition Executive Summary In Indonesia, the productive-age population has grown fast during the past decade, resulting in the consistent decreasing of dependency ratio in recent years (Figure E1). Indonesia is currently having one of the largest ever youth cohorts. This will obviously make a difference to the society and the work place. How to educate the youth and turn them into productive labor force and future leaders is closely linked to the country’s future. This is a window of opportunity that will not last for very long. The transitory nature of the “youth dividend� and the low dependency ratio that Indonesia is now experiencing can be shown from the spectrum of the current popu- lation structures of India, US, and Japan. For example, India has a population structure with under 5-year-old population being the largest, a stage that Indonesia has passed. In comparison, US and Japan’s populations are experiencing stable growth and ageing respectively, stages that Indonesia will reach with continuous declining the total fertility rate in the coming decades. With the globalized economy, well-educated youth will be critical to Indonesia’s competitiveness in the future. Demand for skilled workers will increase with skill-oriented technological change. In addition, a large pool of skills also facilitates knowledge spillover and attracts technology imports. In the past decades, significant changes of Indonesia’s labor market have already taken place. Non-agricultural jobs increased significantly, and skilled labor in non-agricultural sector is on higher demand. In the meantime, higher level professional and managerial jobs have also increased. In contrast, unskilled, agricultural, and administrative workers are on lower demand. Overall, the earnings differentials between people with different education levels are significant. The marginal returns to higher levels of education - senior secondary or tertiary level - are increasing (Figure E2). Figure E2. Marginal rates of returns to education 20% 15% 10% 5% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 marginal rate of return junior secondary marginal rate of return senior secondary marginal rate of return tertiary Source: SAKERNAS (2001-2009). With this transition focus, this sector report attempts to assess Indonesia’s senior secondary school system from three angles (Figure E3): (1) How well does the senior secondary education prepare the Indonesian youth for transition? What are the outcomes? Is there equitable access? (2) How are the senior secondary schools in Indonesia prepared for delivering their promises? Do they have adequate resources and inputs? (3) How is the system prepared? Are there effective quality assurance mechanisms? Is the system financing arrangement adequate? Issues and Policy Agenda for Senior Secondary Education ix Figure E3. A framework for sector assessment 1. How well does senior secondary education prepare youth transition: outcomes, access, and equity 4. Policy Senior secondary recommendations for 2. Are schools education: better preparing preapared : inputs preparing Indonesian youth and school nancing Indonesian youth for transition for transition 3. Is the system prepared: quality assurance and system nancing How well does the senior secondary education in Indonesia prepare youth for transition: outcome, access, and equity Indonesia ranked low on the Programme for International Student Assessment (PISA), which tests 15-year-olds in read- ing, mathematics, and science. About half of the tested 15-year olds were sampled from senior secondary schools in Indonesia. The overall performance of Indonesia’s 15-year-olds in PISA confirms that a majority of the students did not achieve beyond the rudimentary level of proficiency in reading, math, and science. In reading, 88 percent of the Indonesian 15-year-olds only reached level 2 and below, almost none reached level 4 and beyond. For math, 94 percent of Indonesian students reached only level 2 and below. What is most alarming is that 33 percent only reached level 1, and 44 percent are below level 1, which is a rudimentary level at which “students can answer ques- tions involving familiar contexts where all relevant information is present and the questions are clearly defined�. Indonesian students with different achievement levels are often sorted into academic and vocational tracks, even though there is little evidence that different tracks of schools exacerbate the achievement differentials. The National Final Learning Evaluation (EBTANAS) results show that Indonesian junior secondary school graduates with higher scores are more likely to enter the academic track of senior secondary education (SMA). However, participating in vocational track (SMK) does not lead to widened gaps in test scores upon the graduation of se- nior secondary education. The achievement gaps are simply carried over and persist. The Indonesia Skills Report (World Bank, 2010a) provides a glimpse of the employer’s perception of the quality of senior secondary education. Overall, the report points to the existence of issues with the relevance and quality of skills. “Quality is a particularly critical issue for senior secondary education graduates (general and vocational), in both the manufacturing and service sector�. The same report also presents the employer’s perspective on the quality of newly hired graduates, which is a selected group from all the applicants in the first place. About one- fourth of employers find secondary graduates to be “below average�. A comparison of performance between general and vocational school graduates also reveals a slight preference over vocational track graduates, as em- ployers tend to give less poor ratings and more “very good� ratings for SMK graduates. x Preparing Indonesian Youth for Transition Executive Summary The Ministry of Education and Culture (MoEC)’s data shows that the overall enrollment at senior secondary level is continuously increasing in recent years. Several patterns emerge: enrollment in public schools has been in- creasing faster than that in private schools, resulting in an increase of the share of public school enrollment from 47 percent to 51 percent during the past 5 years. Most notable is the fast expansion of enrollment in vocational schools, or SMK, averaging 12-14 percent annual growth since 2004/05. Public SMA and private SMK absorb the largest share of enrollments currently. Private SMA has much smaller share of total enrollment, but remains important (20 percent of total enrollment). Analysis of household survey data shows the distinctive regional disparities in senior secondary school enroll- ment - its overall level, as well as the composition by school type. For example, Maluku Province has the high- est Gross Enrollment Rate (GER), at 90 percent, of which about 90 percent of the total enrollment is in SMA. In contrast, the total enrollment rate is only at around 50 percent in West Java, of which 60 of the enrollment is in SMA, and the remaining 40 percent is in SMK. Comparing GER in 2006 and 2009, almost all provinces have made progress in terms of raising GER of senior secondary education as a whole, with very few exceptions. West Java and Yogyakarta, for example, have largely stayed the same. One distinctive feature of this broad growth is that it is largely due to the accelerated expansion of SMK enrollment, while SMA enrollment growth stays more or less on the same track. There has long been a debate on whether SMA or SMK graduates have better labor market outcome. Chen (2008) found that there were no significant differences in terms of unemployment rate upon graduation, after controlled for the selection bias caused by college entry. Comparing SMK and SMA graduates who do not go to college, SMK graduates seem to have a better chance of landing a job upon graduation. However, this simple comparison ignores the fact that a significantly larger proportion of SMA graduates go to college. The unemploy- ment rate differentials become insignificant after this selection bias is corrected. Newhouse et al (2009) also shows that there is no significant earnings differences for fresh graduates, but the earnings of SMK graduates depreciates much faster after 7-8 years. Both demand and supply side factors play key roles in determining senior secondary education enrollment. Statistical analysis shows that the provincial senior secondary education GER is highly correlated with provincial junior secondary school GER, but not with provincial GDP per capita, two key variables capturing the demand- side factors. In the meantime, the number of schools per million people within province - a key supply-side measure - is also statistically significant: the larger the number of schools relative to population, the higher the enrollment ratio. Figure E4. Senior secondary GER by income quintile 100% 80% SMK public SMK private 60% SMA privat SMA public 40% 20% 0 poorest 2 3 4 richest Source: SAKERNAS (2009). Issues and Policy Agenda for Senior Secondary Education xi Senior secondary education GER disparities across household income quintiles are large (Figure E4). Children from the richest 20 percent of households enjoy over 80 percent GER. In contrast, only a little over 20 percent of the children from the poorest 20 percent of the households can ever get enrolled in senior secondary education. However, there is negligible difference in the distribution of the types of the schools enrolled across children from families at different income levels. Private schools or vocational schools serve the rich as well as the poor. Are schools prepared: inputs and resources In terms of input measures of education quality, the most worrisome finding is that a significant proportion of teachers have second jobs that serve as additional income source, particularly for the private school teachers (Figure E5). While a quarter of public school teachers have second jobs, nearly half of all private school teach- ers do. Some of these second jobs can be teaching in other schools, but a majority of them are in other private employment. Teachers spend significant time on their second jobs. Probably because of their vocational skills, vocational school teachers spend longer hours on the second jobs. In addition, teachers in all types of schools spend less than 24 hours per week at their first teaching job – a minimum level that is stipulated by law. Figure E5. Working hours: teaching and 2nd job 35 30 9.3 Hours spent per week 25 7.1 on other jobs 20 Hours spent per week 2.7 3.5 on teaching at this school 15 20.0 21.7 10 17.0 17.0 5 0 public general public vocational private general private vocational secondary school secondary school secondary school secondary school Source: SAKERNAS (2009). Key differences exist in the compensations of public and private school teachers. Private school teachers are paid much less – on average only half of the amount of the regular remuneration of the public school teachers. Pri- vate schools teachers, however, do have more earnings from their second jobs. This dual compensation system can exist probably because that the inspiration of many private school teachers is to become public employees eventually, teaching in either public or private schools, which will give them better job security and compensa- tion eventually. Disparities are large in terms of resources available at school level. Resources available to public schools (includ- ing teacher salaries) on per-pupil basis are nearly twice as much as those at private schools. One key source of this difference is civil-service teacher salaries, which are much higher than those of non-civil service teachers, a majority at private schools. For non-salary resources, central government direct subsidies to schools seem to xii Preparing Indonesian Youth for Transition Executive Summary benefit private and public schools equally. However, local government subsidies mostly benefit public schools. In addition, public schools actually charge higher school committee fees, while private schools have “other� sources of funding, mostly from private foundations or donations. Even though SMK has slightly higher per pupil spending in general, the larger resource difference lies between public and private schools. Is the system prepared: management, quality assurance, and system financing Set aside their validity or realism, currently, neither the National Standards nor the Minimum Service Standards are systematically enforced, regularly assessed, and timely reported. Nationwide student assessments are carried out at the end of education cycles, mostly for the selection of students to the next cycle, but not for account- ability purposes. There are no established mechanisms for reporting the outcomes of student performance or average school performance. Teacher evaluation is currently going through the “certification� process, but con- tinued performance evaluation of teachers has not been in place. In addition, no formal impact evaluation is in place on regular basis for education policies and programs. Schools are required to be “accredited�, in alignment with the National Standards in 8 areas. However, the National Accreditation Agency (BAN)’s capacity is at present severely constrained. Many schools have been given an accreditation rating at one point in time, which are rarely updated. In addition, registering private schools, and maintaining operation requirement is even more challeng- ing, given the large and ever-increasing number and changing conditions of these schools. Public resources for financing the sector are used more in a “uniform� manner rather than pro-poor with appropri- ate targeting. A per-student subsidy is provided to all schools, both public and private, to finance the education of students in basic education (Grade 1-9). The present form of the uniform unit cost does not address the need for narrowing the gap between the better-off and disadvantaged schools. There are no structured subsidies to senior secondary education at the moment. The resource differentials between public and private schools re- main large. One key public resource is teachers in civil service, paid by the Government. The uneven distribution of these teachers, beyond between public and private schools, but also across schools situated in better off and disadvantaged areas, in urban and rural areas, also reflects the inequitable distribution of public resources. In addition, there are no accountability measures at the school level based on performance. Civil service teach- ers are paid based standard salary structure. Principals do perform teacher assessment, but it does not lead to rewards or sanctions. Local education officers inspect schools, but it rarely brings any real consequences either. The per-student public spending in Indonesia is lower than developing countries’ average. Figure E6 shows that on average Indonesia spends about 12 percent of its GDP per capita on a senior secondary school student. This is lower than developing countries’ average of 17.3 percent, and developed countries’ average of 22.3 percent. This level of public spending is equivalent to about US$300 per student, inclusive of teacher salaries. Within this amount, it is estimated that only around 50 percent or less flow to schools directly in the form of paying teacher salaries (as often categorized as “routine� spending by school’s accounting book), and various cash subsidies to schools (“Bantuan Operasional Sekolah� as central government grant, and “Bantuan Operasional Propinsi� as local government grant). According to Indonesia Family Life Survey (IFLS)’s school survey in 2007- 2008, a public senior secondary school received approximately US$200 per student, while a private school re- ceived around US$30. The spending that does not flow to schools represents the portion that stayed at central or local government level which is spent on behalf of schools, or for administrative purposes. Household expenditure on senior secondary education constitutes heavy financial burden. As expected, richer households pay more out-of-pocket. However, it only comprises a small share (less than 10 percent) of the total household expenditure of the richest. In contrast, the household in the poorest income quintile can spend as much as 30 percent of household total expenditure on a child at senior secondary school (Figure E7). Issues and Policy Agenda for Senior Secondary Education xiii Figure E6. Public current expenditure on secondary education per pupil as % of GNP per capita 58.7 60 50 40 30 22.3 20.1 20.2 20.4 21.4 16.5 16.7 17.3 18.5 20 15.9 12 12.9 12.9 13.0 13.4 13.6 13.8 14.5 10 0 Indonesia Mongolia Colombia Brazil Singapore Bangladesh Chile Jordan Australia Turkey India Developing countries Malaysia Republic of Korea New Zealand Argentina Poland Developing countries Cuba Source: World Education Indicators (UNESCO, 2009). Figure E7. Household expenditure on senior secondary education as % of total household expenditure, by income quintile Other 4,000,000 35% Courses 3,500,000 30% Transportation/School Bus Stationary 3,000,000 25% Text Book School and Sport Uniform 2,500,000 20% Teaching Support Material 2,000,000 Test/Evaluation 15% Student Intra School 1,500,000 Organization Fees/OSIS Practice 10% 1,000,000 School Commitee Fees/POMG/BP3 5% School Fees/SPP 500,000 Registration Fees 0 0% % of Per Child in Senior Secondary Poorest 2 3 4 Richest Expenditure to Household Income Source: SUSENAS (2009). xiv Preparing Indonesian Youth for Transition Executive Summary Policy recommendations Looking ahead, diversified strategies are needed for expanding senior secondary education in Indonesia, given the much varied conditions of the provinces. There are some provinces where access to junior secondary educa- tion is still a major issue, and priorities should be given to junior secondary education accordingly. In many other provinces, limited school places have represented a binding constraint to further broadening senior secondary school access. Building more schools will need to be mapped according to the population distribution, and considering using existing excess teachers. Equitable access will remain a key challenge. Nationwide, over 68 percent of the children from the lowest in- come quintile families are not completing Junior Secondary School. There is also a large urban/rural gap, with 60 percent of rural students not yet completing grade 9. The wealth divide in opportunities of pursuing higher educational attainment remains large. The high cost of senior secondary education has made it unreachable by the poorest. The current school-based scholarships program has not been able to reach those who were left out in the first place. Targeted and household-based voucher system will be the future for better supporting the under-privileged. Rethinking the division of general and vocational educational track will also be needed while establishing a long term vision for senior secondary education in Indonesia. The vocational secondary school provides a fast route for training medium-level skilled workers for the immediate needs of the labor market. Widening the open- ings for the SMK graduates to pursue skills upgrading will be more and more needed in the future with more sophisticated demand for skills from the labor market. In the meantime, how to offer SMA graduates who do not enter tertiary education necessary labor market skills is probably more challenging. Responding to the future expansion of tertiary education as well as the labor market demand for higher level of skills, these two tracks will probably become similar in the future, and converge at an integrated system offering solid basic skills together with diversified in-school vocational training programs. In the interim, a variety of options can be considered to strengthen the two tracks of senior secondary education. SMK’s curriculum should be more flexible. A spectrum of different intensities of vocational subject deliveries can be considered. For example, some may just be vocational course work, others may require significant im- mersions and internships at firms or production units. The vocational certificate in addition to senior secondary school diploma can reflect these varieties. SMA students should also have access to SMK coursework through school partnerships, or even night courses offered by SMK with capacities, and obtain similar vocational training certificates. Measuring learning outcome and skills proficiency is essential for quality improvement. The national education assessment program needs to be put in place to regularly monitor education quality, to diagnose existing qual- ity issues, and to devise remedial measures. Localized monitoring of learning outcomes should also be put in place to serve as diagnostic, motivational, and accountability tools at individual teacher and student level. This is a necessary condition for implementing outcome-focused curriculum. Decentralization in Indonesia has provided an overall vision of local control of education service delivery. The overall accountability arrangement and quality assurance will need a clearer definition of responsibilities across agencies, with separated but much strengthened functions in oversight, measurement, reporting, policy and programming, together with an effective mechanism to introduce accountability from local to the central level. Expanding the access to secondary education will need more public resources at this level. It is never easy to determine what is an appropriate level of public financing of education in a given country. Currently, Indonesian families pay 3-4 times of the Government budget for the direct and indirect costs, including various fees, trans- portation, uniform, teaching and learning materials, and other incidentals. Comparisons with other countries can provide a useful guide for making judgment on levels of government funding. Issues and Policy Agenda for Senior Secondary Education xv Giving that 20 percent of Government budget has already been allocated to the education sector, intra-sectoral allocations and spending efficiencies appear to be the first order issues that need to be addressed. This will aim at maximizing the output using existing capacity. Better deployment of teachers, increase in teacher workload, reduction in their double-jobs, and improvement in their motivation, performance, and accountability, will be the most direct measures. Better use public resources also need better targeting strategies, supporting the most disadvantaged areas and population groups. On the supply side, public resources should be used to narrow the geographic inequality due to the marked urban bias in school locations. The creation of new senior secondary schools in the coming years will present a prime opportunity to reduce the distance-to-school factor in rural areas. These new schools should carefully target for the rural kecematan and kabupaten where presently lack senior secondary schools. On the demand side, establishing means-tested system to financially support children from families of very low income will further narrow the demand gap. For a majority of private schools in Indonesia, being private primarily means being poor and under-resourced. It also means that without public intervention, the learning gap between public and private students will likely to increase, as private schools tend to enroll those who are not able to enter public school system with lower academic achievement at junior secondary school level. Targeted demand-side financing such as school voucher can also serve as an instrument that provides incentives and financial means to improve private schools as they make efforts to attract students and resources. Nonetheless, some public investment would be needed at the beginning, such as to upgrade school’s teaching and learning conditions, to improve teacher knowledge and skills, and to improve school management, before the new mechanism can work. International experience tells us that reforming senior secondary education will face many daunting challenges. While the reform recommendations offered here are mainly based on accumulated global experience, policy- makers need to be highly aware that the impact of reforms varies in different institutional and demographic settings. As Indonesia moves ahead towards the goal of universal 12-year education, piloting reforms in small scale before rolling out, and evaluating impacts and cost-effectiveness of these reforms are crucial to ensure their long-term success and sustainability. xvi Preparing Indonesian Youth for Transition I. Preparing Indonesian Youth For Transition: Framework and Context A. Managing senior secondary education as preparing Indonesian youth for transition Senior secondary education has become a focal point pressing for public policy attention in Indonesia. In the past, senior secondary schools were designed largely to prepare elites for advanced study. Today, in contrast, they enroll a majority of the youth population in Indonesia. They are the last stage of education to do so, with around 60 percent of young Indonesians participating in senior secondary education compared to only 20 percent par- ticipating in tertiary education (Figure 1.1). One in three of the senior secondary graduates goes to tertiary edu- cation, while the other two enter labor market directly. Senior secondary education is therefore a key stage of transition for future pathways to fulfill the potentials of the Indonesian youth. In this context, senior secondary schools today represent the last stage in the formal schooling system whose key objective should be to ensure that young Indonesians leave education with at least the minimum qualifications required for employability and for further education and training. Figure 1.1. Senior secondary education as transition: GER by level of education 20% tertiary education 60% senior secondary education 85% junior secondary education 100% primary education With this transition focus, this sector report attempts to assess Indonesia’s senior secondary school system from three angles (Figure 1.2): (1) How well does the senior secondary education prepare the Indonesian youth for transition? What are the outcomes? Is there equitable access? (2) How schools are prepared for delivering their promises? Do they have adequate resources and inputs? (3) How the system is prepared? Are there effective quality assurance mechanisms? Is the system financing arrangement adequate? These assessments will form the analytical base for shaping the future agenda for senior secondary education in Indonesia. 2 Preparing Indonesian Youth for Transition Preparing Indonesian Youth for Transition: Framework and Context Figure 1.2. A framework for sector assessment 1. How well does senior secondary education prepare youth transition: outcomes, access, and equity 4. Policy Senior secondary recommendations for 2. Are schools education: better preparing preapared : inputs preparing Indonesian youth and school nancing Indonesian youth for transition for transition 3. Is the system prepared: quality assurance and system nancing B. Country and sector context Overview Senior secondary education has become of increasing importance, as most countries throughout the world have achieved universal primary education and many are well on their way to the universal completion of 9-year basic education. Indonesia is no exception to these trends. Since independence, the government’s drive to expand education coverage has led to the continuous increase in the primary school gross enrollment rate from below 70 percent in 1975 to near universal coverage in 1995. In 1984, six-year compulsory education was introduced, ensuring that all children to attend elementary school. This was followed in 1994 by the establishment of a nine- year compulsory education system, covering the six years of primary and three years of junior secondary school- ing. Currently, Indonesia is on track to providing universal nine-year basic education, with gross enrollment rates at the junior secondary level reaching over 80 percent in 2010 (SUSNAS 2010). Most recently, the Government of Indonesia unveiled plans to increase compulsory education to 12 years. Rec- ognizing the uneven progress in achieving universal 9-year basic education, the stepping up efforts to introduce compulsory 12-year education for all Indonesian children will start with initial pilot programs in selected regions and roll out nationwide by 2014. This will be the third extension of compulsory education in the past three decades. The shift of attention and investment priority towards improving education quality and expanding access to the higher levels of learning is in part a response to the soaring demand for places in senior secondary education as the number of graduates from basic education increases rapidly. But it also reflects the belief that successful participation in the technology-driven global economy requires skilled people, many with advanced science and technology training. Advanced human resources foundation is essential for effective participation in the world economy that has more complex patterns of production and trade than at any other time in the past. Broadening access to secondary education is thus not only a response to social pressure, but also an economic imperative. Issues and Policy Agenda for Senior Secondary Education 3 Indonesia’s human resource base is still low as measured by the overall education attainment profile of adult population (Figure 1.3). Among adults age 25 to 64, over 70 percent have not reached senior secondary educa- tion. In comparison, OECD countries’ average is around 30 percent. This is a large gap to narrow if Indonesia is inspired to be an upper-middle to high income country by 2025 (Republic of Indonesia, 2011). Figure 1.3. Education attainment of adult population age 25-64 Japan Russia US Canada Korea New Zealand EU19 average OECD average Australia Malaysia Chile Thailand Brazil Indonesia Mexico 0 20 40 60 80 100 below upper secondary upper secondary post-upper secondary/tertiary Source: World Education Indicators, 2009. Indonesia’s formal school system consists of: pre-school education, basic education (primary plus junior second- ary education), senior secondary education, and higher education (Figure 1.4). Pre-school education is aimed at stimulating physical and mental growth of pupils outside of the family circle before entering primary education, providing an early readiness for growth and development of attitudes, knowledge, skills and initiative. Pre-school education is delivered through kindergartens or “play groups�. Kindergartens are part of the school-based formal education system while the play groups are part of the non-formal system. Pre-school is provided for children from 5 to 6 years old for a period of one to two years, while play groups are usually attended by younger children. Basic education consists of six years of primary school education and three years of junior secondary education. The goal of basic education is to provide the students with basic skills as well as to prepare them to pursue their studies in secondary education. Primary education is delivered through general primary school, or special pri- mary school for handicapped children. Similar school types exist at junior secondary level as well. Primary and junior secondary schools usually have separate school sites, with separate teaching staff. In recent years, the program of “one-roof school� combining primary and junior secondary education is becoming ever popular as the Government makes effort to expand the access to junior secondary education particularly in remote areas. Islamic schools are also important education service providers, overseen by the Ministry of Religious Affairs, and including both Islamic primary school (Madrasah Ibtidaiyah or MI) and Islamic junior secondary school (Madrasah Tsanawlyah or MT). One of the distinctive characteristics of senior secondary education in Indonesia is the prominence of vocational schools1. General secondary education gives priority to expanding knowledge and developing students’ skills and preparing them to continue their studies to the higher level of education. Vocational secondary education gives priority to expanding specific occupational skills and emphasizes the preparation of students to enter the world of work and to build their professional attitude. In addition, religious secondary and special secondary schools are also important providers of senior secondary education. There are vocational schools at junior secondary level as well, but with only about 10 percent of total enrollment coverage at that level. 1 4 Preparing Indonesian Youth for Transition Preparing Indonesian Youth for Transition: Framework and Context Figure 1.4. Education system in Indonesia Formal Age Year Non-formal Programs Level 27 21 26 20 Doctorate (S3) 25 19 24 18 Master (S2) 23 17 Higher education Open university 22 16 21 15 undergraduate 20 14 (D1, D2, D3, D4, S1) 19 13 18 12 General Sr. Sec.; Senior Package C 17 11 Vocational Sr. Sec. secondary equivalency program 16 10 15 9 Package B 14 8 Jr. Secondary equivalency program 13 7 12 6 Basic 11 5 education 10 4 Package A Primary education 9 3 equivalency program 8 2 7 1 6 OA Kindergarten 5 OB Source: www.seameo.org/index.php?option=com_content&task=view&id=62&Itemid=85 Indonesia’s higher education offers 1 to 4-year diploma, as well as Bachelor’s degree, and postgraduate programs. The three key objectives of higher education as stipulated by the Ministry of Education are “education, research, and community service�. In recent years, the concept of “community college� has been widely discussed and recognized as an affordable and pragmatic way to provide post-secondary education and training, with focusing on professional skills to meet the local economy need. Looking ahead, a critical challenge of higher education in Indonesia also lies in producing highly skilled researchers. The extremely small number of postgraduate degree holders from Indonesian higher education institutions, together with the overall low productivity of research, will become a key bottleneck for Indonesia to develop R&D capacity and to gain a competitive edge in the global economy. Private sector is a critical partner in providing education services at each level. The higher the education level, the larger share of enrollment is in private schools and institutions. For example, while about half of the senior secondary education enrollment is in private schools, nearly 70 percent of the higher education enrollment is covered by private higher education institutions. There has been increased public support to the private provid- ers in recent years. Nonetheless, how to narrow the quality and resource gaps remains a key challenge. Issues and Policy Agenda for Senior Secondary Education 5 Socioeconomic context The demographic trend shows that Indonesia is having one of the largest youth cohorts currently. This large youth cohort will obviously make a difference to the society and the work place. How to educate them and turn them into productive labor force and future leaders is closely linked to the country’s future. This is a window of opportunity that will not last for very long. Figure 1.5 compares Indonesia’s current population structure with that of several other countries at different stages of demographic change. In Indonesia, the total fertility rate has been declining continuously, leading to the consistent decrease of the dependency ratio in recent years. The current population structures of India, US, and Japan provide snapshots of a typical demographic trend, illustrating the transitory nature of Indonesia’s “youth dividend�. In India, for example, the under 5-year-old population is still large and dependency ratio high; while US and Japan are at the stable growth and ageing stage respectively, passing through the similar early phases of demographic transition. Figure 1.5. Comparison of population structure, 2010 Indonesia 2010 Japan 2010 100 + 100 + 95 - 99 95 - 99 90 - 94 90 - 94 85 - 89 85 - 89 80 - 84 80 - 84 75 - 79 75 - 79 70 - 74 70 - 74 65 - 69 65 - 69 60 - 64 60 - 64 55 - 59 55 - 59 50 - 54 50 - 54 45 - 49 45 - 49 40 - 44 40 - 44 35 - 39 35 - 39 30 - 34 30 - 34 25 - 29 25 - 29 20 - 24 20 - 24 15 - 19 15 - 19 10 - 14 10 - 14 5-9 5-9 0-4 0-4 12 10 8 6 4 2 0 2 4 6 8 10 12 6 5 4 3 2 1 0 1 2 3 4 5 6 population (millions) population (millions) male female male female India 2010 US 2010 100 + 100 + 95 - 99 95 - 99 90 - 94 90 - 94 85 - 89 85 - 89 80 - 84 80 - 84 75 - 79 75 - 79 70 - 74 70 - 74 65 - 69 65 - 69 60 - 64 60 - 64 55 - 59 55 - 59 50 - 54 50 - 54 45 - 49 45 - 49 40 - 44 40 - 44 35 - 39 35 - 39 30 - 34 30 - 34 25 - 29 25 - 29 20 - 24 20 - 24 15 - 19 15 - 19 10 - 14 10 - 14 5-9 5-9 0-4 0-4 80 70 60 50 40 30 20 10 0 10 20 30 40 50 60 70 80 12 10 8 6 4 2 0 2 4 6 8 10 12 population (millions) population (millions) male female male female Source: International Data Base, US Census Bureau (www.census.gov/ipc/www/idb). Indonesian data from Indonesia Bureau of Statistics (Badan Pusat Statistik Republik Indonesia. www.bps.id.co). 6 Preparing Indonesian Youth for Transition Preparing Indonesian Youth for Transition: Framework and Context With slower population growth, the share of the Indonesian youth under 29 years of age has already declined from 36 percent in 2000 to 33 percent in 2010. Figure 1.6a shows the largest increase of working-age popula- tion age 40-44 during the past two decades. Fast urbanization is another striking trend during the past decades. Twenty years ago, the ratio of urban to rural population age 16-18 was about 0.6:1. It is close to 1:1 by 2010 (Fig- ure 1.6b). The increase of this ratio has also slowed down during the most recent years. Indonesia within a de- cade will probably reach the end of its youth dividend that has produced expanding numbers of new labor force entrants helping keep wages low and increase output. Together with slowed urban youth population growth, it is expected that the pressure of youth unemployment rates will be reduced. However, as the overall population becomes older, economic growth will increasingly depend on the ability to expand the capital base and create a more productive workforce with higher levels of education and training. Figure 1.6. Indonesia’s demographic change, 1990-2010 Age distribution of Indonesian population, Rural-urban distribution of 16 - 18 year-olds, , 1990 and 2010 1990 -2010 100 + 8,000,000 95 - 99 90 - 94 7,000,000 85 - 89 80 - 84 75 - 79 6,000,000 70 - 74 65 - 69 60 - 64 5,000,000 55 - 59 50 - 54 4,000,000 45 - 49 40 - 44 35 - 39 3,000,000 30 - 34 25 - 29 2,000,000 20 - 24 15 - 19 10 - 14 1,000,000 5-9 0-4 0 12 10 8 6 4 2 0 2 4 6 8 10 12 1990 2000 2010 Population (million) Male 1990 Female 1990 urban rural Male 2010 Female 2010 Source: Indonesia Bureau of Statistics. Source: SUSENAS , various years. With the globalized economy, well-educated workforce will be critical to Indonesia’s competitiveness in the fu- ture. Demand for skilled workers will increase with skill-oriented technological change. In addition, a large pool of skills also facilitates knowledge spillover and attracts technology imports. In the past decades, significant changes of Indonesia’s labor market have already taken place. As Figure 1.7 shows, non-agricultural jobs in- creased significantly, and skilled labor in non-agricultural sector is on higher demand. In the meantime, higher level professional and managerial jobs have also increased. In contrast, unskilled, agricultural, and administrative workers are set on lower demand. Issues and Policy Agenda for Senior Secondary Education 7 Figure 1.7. Job profile change between 2001 and 2009 Skilled Manual (6.06%) Professional & Manager (2.39%) Administrative Technician & Sales Unskilled (-1.07%) (-0.54%) Manual (-1.13%) Skilled Agricultural (-5.72%) Source: SAKERNAS, 2001 and 2009. Sector context Indonesia has already achieved universal primary education, and is close to the goal of 9-year universal basic education. With more and more graduates from basic education, the demand for education is moving to the higher levels of the education system. Figure 1.8 shows that senior secondary and tertiary education have been the fastest-growing sub-sectors in terms of coverage during the past decade. Between 2005 and 2010 the gross enrolment ratio (GER) for primary and junior secondary education have largely been stable, while senior second- ary education GER grew from 55 to 62 percent, and tertiary education from 10 to 15 percent. Figure 1.8. Trend of gross enrollment ratio, by education level 120 GER SD 100 GER SMP GER SMU 80 GER Higher 60 40 20 0 2000 2001 2002 2003 2005 2006 2007 2008 2009 Source: SUSENAS (2000-2009). 8 Preparing Indonesian Youth for Transition Preparing Indonesian Youth for Transition: Framework and Context The current senior secondary education coverage in Indonesia is comparable with other countries with similar levels of GDP per capita (Figure 1.9). However, even though the senior secondary enrollment rate has expanded steadily, by 2009 it had only reached 62 percent. The gap widens further when considering the overall stock of hu- man capital. The average years of schooling of Indonesian adult population is only around 5 years, lagging behind neighboring countries such as China, Thailand, Malaysia, and the Philippines. The currently rising enrollment rate at senior secondary and tertiary education level is a promising sign that Indonesia is catching up. Ensuring a con- ducive policy environment for adequate demand and supply of higher levels of education will be a key challenge. Figure 1.9. Senior secondary GER by GDP per capita, international comparisons 140 120 Upper secondary GER 100 80 IND 60 40 20 0 - 10,000 20,000 30,000 40,000 50,000 GDP p. c. Source: GER from UIS, Global education digest; GDP per capital from WB in current US$. Moving up the ladder of education attainment of the overall population has been high on Indonesia’s develop- ment agenda. Whether to extend compulsory education to senior secondary level has been debated among key policy makers in Indonesia recently. Indonesia is among the majority of the countries in the region that have 9-year compulsory education, up to junior secondary education (Figure 1.10). OECD countries on average have more years of compulsory education, together with overall higher education attainment. While making senior secondary education compulsory would certainly show the political commitment to promoting better educa- tion attainment, what it implies in terms of enforcement and public support needs to be well thought, particu- larly in solving both demand and supply side bottlenecks. Figure 1.10. Distribution of years of compulsory education, OECD and Asian countries OECD Asia 14 14 12 12 Frequency Frequency 10 10 8 8 6 6 4 4 2 2 0 0 5 6 7 8 9 10 11 12 13 5 6 7 8 9 10 11 12 13 Compulsory Education (Years) Compulsory Education (Years) Source: UNESCO website. Issues and Policy Agenda for Senior Secondary Education 9 In addition to expanding access, a key challenge that Indonesia’s senior secondary education is facing is how to balance the double roles of setting a solid foundation for advanced learning, and of providing necessary skills for those who are ready to enter the labor market. Currently, secondary school graduates appear to be the “weak- est link� with regard to skills profiles. There are particularly serious gaps in practical skills (practical knowledge of the job), problem solving and creative thinking, leadership, team orientation, and ability to work independently. These are combined with very significant gaps in English and computer skills, which are critical to address the challenges of the export-oriented and technologically-intensive sector of the economy (The World Bank 2010a). The recent policy for the expansion of vocational track (SMK) of senior secondary education has pushed the share of SMK enrollment from 40 percent on average to 46 percent recently (Figure 1.11). There is critical need to re- view the curriculum design and delivery of both tracks aiming at building essential cognitive and non-cognitive skills for all senior secondary school students. Figure 1.11. Enrollment share of SMK 0.50 0.48 0.46 0.44 0.42 0.40 0.38 0.36 0.34 0.32 0.30 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Source: MONE statistics, 1994-2008. Justifications for increasing investment in senior secondary education Economic analysis supports increased investment in senior secondary education, and further tertiary education. The marginal returns to secondary and tertiary education are increasing in recent years in Indonesia (Figure 1.12a), while those to junior secondary education and below are decreasing. This is probably linked to the tech- nological innovations, openness to world trade, and sustained economic growth that have fueled demand for skilled workers. In addition, employer surveys increasingly indicate that shortages of skilled workers constitute constraints for new private sector investment and growth (World Bank, 2011). A 2008 survey of 250 companies (World Bank, 2010a) also confirmed the higher labor market demand for more complex skills. Figure 1.12. Returns to education by level, 2001-2009 a. Rates of returns b. Earnings di erentials 20% 120% 100% 15% 80% 60% 10% 40% 5% 20% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 marginal rate of return junior secondary SMP/primary marginal rate of return senior secondary SMA(K)/primary marginal rate of return tertiary Tertiary/primary Source: SAKERNAS. 10 Preparing Indonesian Youth for Transition Preparing Indonesian Youth for Transition: Framework and Context Investment in education directly generates income, and stimulates economic growth. This can be reflected by the earnings differentials by education level (Figure 1.12b). Those who have graduated senior secondary edu- cation earn 60 percent more than those who only have primary education. In addition, over the past decade, the earning differentials between workers with more education and those with less have widened, despite the expansion of the education system and an increase in the supply of educated workers at all levels. Public investment in senior secondary education is justified on the grounds of the social benefits of secondary education. The positive externalities of secondary education on health, gender quality, and poverty reduction are even stronger than those of primary education (World Bank, 2005), although these are difficult to quantify in economic terms. Equally important, public investment in senior secondary education is critical to narrow the disparities in access to education and promote social cohesion. Figure 1.13 shows that the disparities in access to education exist at each level of education in Indonesia, but widened drastically at senior secondary level. Ac- cording to SUSENAS 2009, nearly 80 percent children from the wealthiest quintile of the families can reach Grade 10, compared with less than 20 percent from the poorest quintile of the families. Figure 1.13. Education attainment by income quintile (2009) Education Attained by Indonesian Age 26-28, Year 2009 100 90 80 70 Percent (%) 60 50 40 30 Graduated Graduated 20 SD/MI SMP/MTs 0 1 2 3 4 5 6 7 8 9 10 Years of Education quintile 1 quintile 2 quintile 3 quintile 4 quintile 5 Source: SAKERNAS. Public interventions in secondary education are also essential to ensure the quality of education, given that the information on school quality is often asymmetric – known to schools but not to parents. This is par- ticularly important in Indonesia with a large share of private schools (Figure 1.14). Private secondary schools currently cover nearly 50 percent of the total enrollment at this level. They play important roles in expanding senior secondary education provision. However, parents cannot always distinguish good versus bad schools. Government setting operational requirement and minimum service standards and enforcing them is therefore essential to protect the households as consumers of education services, ensuring that what they are paying for is not of sub-standard. Issues and Policy Agenda for Senior Secondary Education 11 Figure 1.14. Share of types of senior secondary education providers public SMA 26% private SMK public SMK 30% 11% private SMA 33% Source: MoNE statistics, 2008-09, PSP. While this report focuses on senior secondary education, many of the issues are common across sub-sectors and need to be tackled at system level. Most distinctive of these issues include the quality of learning as reflected in the international comparative studies, effective teacher management; quality and resource gaps between private and public schools; and institutional arrangement for quality assurance and financing. Some other issues need to be confronted directly at the senior secondary level, such as the tracking policies of students into aca- demic and vocational curricular streams, the large disparities in access, and the high cost to households. Following this chapter, Chapter 2 discusses how well the senior secondary education prepares the Indonesian youth for transition, focusing on learning and labor market outcomes, and access opportunities. Chapter 3 looks into how schools are prepared for delivering services with adequate resources and inputs. Chapter 4 examines system level issues including quality assurance mechanisms and financing arrangement. Chapter 5 concludes and summarizes the policy directives. 12 Preparing Indonesian Youth for Transition II. How Well Does Senior Secondary Education Prepare Youth for Transition: Outcome, Access, and Equity This chapter examines the outcomes of senior secondary education in Indonesia in terms of preparing the gradu- ates for higher level of education as well as direct entry to the labor market. In recent years, there is a growing share of Indonesian senior secondary graduates seeking higher education. But a majority of them still start work directly upon graduation. What further complicates the situation is that the academic (SMA) and vocational (SMK) tracks of senior secondary schools do not necessarily correspond exactly to the two destinations: a large share of academic track graduates enters the labor market after graduation; and in the meantime, a growing share of vocational track graduates pursuits higher education (Figure 2.1). This chapter will start by examining the labor market outcomes of senior secondary graduates, followed by a close look at the learning outcomes of the Indonesian youth, particularly their performance in several international learning assessments. This chapter will also cover the trend of access to senior secondary education in Indonesia, and its determinants, particularly to identify demand versus supply side factors that affect these trends. Equity and inclusiveness in access to senior secondary education will be an important dimension to be discussed. Figure 2.1. Share of graduates continuing to tertiary education 40% 35% SMA 30% SMK % continue to tertiary 25% 20% 15% 10% 5% 0% 28 27 26 25 24 23 22 age Source: Indonesia Family Life Survey 4 (IFLS4, 2007-08). A. Outcomes of senior secondary graduates Labor market outcome: employment opportunities and earnings It is often observed in Indonesia that unemployment rate goes higher with higher level of education (Figure 2.2a). The aggregated unemployment rate, however, often does not distinguish the types of jobs that people with different education attainment are looking for. In Indonesia, higher unemployment rate of youth with higher education attainment, particularly immediately after graduation, can largely be explained by the difficul- ties of entering formal job market (World Bank, 2010b). Currently, over 60 percent of Indonesian labor force is in informal sector. The high severance pay and other rigid labor regulations have constituted key barriers of creat- ing more formal jobs (World Bank 2010c). Nonetheless, compared with primary and junior secondary school graduates, senior secondary school graduates in Indonesia are more likely to hold a formal sector job (Figure 2.2b). The likelihood increases with labor market experience. While for primary and junior secondary graduates, the chances are relatively constant throughout the lifecycle, remaining at below 20 percent for junior secondary graduates, and below 10 percent for primary schools graduates. 14 Preparing Indonesian Youth for Transition How Well Does Senior Secondary Education Prepare Youth for Transition: Outcome, Access, and Equity Figure 2.2. Unemployment and formal sector employment, by education level Unemployment Rate (Sakernas February 2009) % with formal jobs 50 100 40 80 30 60 % % 20 40 10 20 0 0 15-90 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60+ 15-90 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60+ age age primary junior secondary senior secondary tertiary Source: SAKERNAS, 2009. Among senior secondary graduates, differentials in labor market outcome seem to exist, as reflected by the varia- tions in wage rate. Figure 2.3 shows that the graduates with better family background, measured by the house- hold’s head’s education level, tend to earn more on the labor market. This can be associated with better quality schools that the better-off households have access to, together with the households’ direct effect on learning and securing better-paid jobs. Figure 2.3. Hourly wage rate by household head’s education 10,000 hourly wage rate (Rp) 8,000 6,000 4,000 2,000 0 primary or less junior secondary senior secondary & above head of household education level Source: SAKERNAS, 2009. There has long been a debate on whether SMA or SMK graduates have better labor market outcome. Chen (2008) found that there were no significant differences in terms of unemployment rate upon graduation, after controlled for the selection bias caused by college entry. Comparing SMK and SMA graduates who do not go to college, SMK graduates seem to have a better chance of landing a job upon graduation (Figure 2.4a). However, this simple comparison does not take into consideration the fact that a significantly larger proportion of SMA graduates go to college (Figure 2.4b). Those who do not go to college constitute a selected group of the cohort. The unemployment rate differentials become insignificant after this selection bias is corrected. Newhouse et al (2009) also shows that there is no significant earnings differences for fresh senior secondary school graduates, but the earnings of SMK graduates depreciates much faster after 7-8 years. Issues and Policy Agenda for Senior Secondary Education 15 Figure 2.4. Outcome of SMA and SMK graduates a. cohorts that are not in school b. proportion including those in school 100 100 80 80 60 60 40 40 20 20 0 0 SMA SMK SMA SMK working not working in college working not working Source: Chen (2008). Employer’s view The Demand for Skills in Indonesia Report (World Bank 2010a) provides a glimpse of the employer’s perception of the quality of senior secondary education. Overall, the report points to the issues with the relevance and quality of skills. “Quality is a particularly critical issue for senior secondary education graduates (general and vocational), in both the manufacturing and service sector�. The same report also presents the employer’s perspective on the quality of newly hired graduates, which is a selected group in the first place. About one-fourth of employers find secondary graduates to be “below average�. A comparison of performance between general and vocational school graduates also reveals a slight preference over vocational track, as employers tend to give less poor ratings and more “very good� ratings for SMK graduates. Learning outcome and test scores Indonesia ranked low on international standardized tests such as the Program for International Student Assess- ment (PISA), which tests 15 year olds in reading, math and science proficiency. About half of the Indonesian 15-year-old sample for PISA is from grade 10, the first year of senior secondary school. Given that these students were just starting their senior secondary education, these assessment results reflect the quality of the student source of senior secondary education. Figure 2.5 shows the results from 2009 PISA. On a proficiency scale of 1 to 6, a majority of the Indonesian 10th-graders cannot reach beyond level 1 in reading, math, and science. What is the most alarming is that 30 percent of the tested 10-graders cannot even reach level 1 in math, the basic level for routine procedures with direct instructions in explicit situations2. On average, private school students performed significantly worse than their peers at public schools, mainly a result of the sorting of higher-achievers to public schools where teaching and learning conditions are often much better. While the shares of students at level 1 and level 2 are largely similar between private and public schools, private schools tend to have much smaller share of relatively high performers (level 3 and above) and larger share of bottom performers (below level 1). See appendix A for a full description of all levels of proficiency in reading, math, and science in PISA 2 16 Preparing Indonesian Youth for Transition How Well Does Senior Secondary Education Prepare Youth for Transition: Outcome, Access, and Equity Figure 2.5. Indonesian Grade 10 student performance in PISA 2009 a. reading b. math c. science 80% 80% 60% 70% 70% 50% 60% 60% 50% 50% 40% 40% 40% 30% 30% 30% 20% 20% 20% 10% 10% 10% 0% 0% 0% -10% -10% -10% -20% -20% -30% -20% -30% -40% -40% -30% -50% -50% -40% -60% -60% -70% -50% -70% -80% -80% -60% public private public private public private 2 3 4 5 6 1 below 1 2 3 4 5 6 1a 1b below 1 2 3 4 5 6 1 below 1 There is wide spread of variations in the learning outcomes of Indonesian students. The PISA results from 2003 to 2009 (Figure 2.6) shows that the achievement disparities between the well-off and the under privileged have been persistent. While reading scores improved between 2003 and 2009, the differences in scores between stu- dents of the 1st and 10th socioeconomic deciles have not been narrowed. The gains in learning outcome were almost evenly spread. What is most worrisome is what is shown in math score. Between 2006 and 2009, the average math score actually declined. However, a close examination reveals that the students from the highest socioeconomic deciles have been able to maintain the achievement, while the decline is mostly in the scores of the students from the lowest socioeconomic deciles, who had the lowest scores to start with. Figure 2.6. Performance of Indonesian students in international assessment 2003, 2006, and 2009 PISA results by socioeconomic decile a. mathematics b. reading 500 500 480 480 460 460 440 440 420 420 400 400 380 380 360 360 340 340 320 320 300 300 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10 socioeconomic decile socioeconomic decile 2003 2006 2009 Source: PISA report. Issues and Policy Agenda for Senior Secondary Education 17 National examination scores and cognitive test scores administered by the Indonesia Family Life Survey (IFLS) can also detect achievement differentials across students in different types of schools. The national test scores show that junior secondary school graduates with higher scores are more likely to enter SMA (Figure 2.7a). Upon graduation, the differences in test scores remain. These differences in national test scores between SMK and SMA graduates are also consistent with what is shown in the cognitive test scores administered under IFLS (Figure 2.7b). However, controlled for junior secondary test score, going to SMK does not seem to lead to any widening of the academic achievement gaps. Figure 2.7. National test scores by SMK/SMA entrants and graduates a. Ebtanas score b. cognitive test score at SSS graduation 8 10 7 8 6 5 6 4 4 3 2 2 1 0 0 bahasa bahasa English Math. English Math. SMA SMK Indonesia Indonesia JSS score SSS score SMA SMK Source: IFLS 2 and IFLS 3. Same patterns exist for the test score differences between public and private schools (Figure 2.8). Students with higher junior secondary graduation scores are more likely to be admitted to public senior secondary schools, while being in a public or private school does not seem to lead widened test score differences upon graduation. Figure 2.8. National test scores by public/private school entrants and graduates a. Ebtanas score b. cognitive test score at SSS graduation 8 10 7 8 6 5 6 4 4 3 2 2 1 0 0 bahasa bahasa English Math. English Math. SMA SMK Indonesia Indonesia JSS score SSS score SMA SMK Source: IFLS 2 and IFLS 3. 18 Preparing Indonesian Youth for Transition How Well Does Senior Secondary Education Prepare Youth for Transition: Outcome, Access, and Equity B. Equitable access to senior secondary education The Ministry of Education and Culture (MoEC)’s data shows that the overall enrollment at senior secondary level is continuously increasing in recent years. Several patterns have emerged: enrollment in public schools has been increasing faster than that in private schools, resulting in an increase of the share of public school enrollment from 47 percent to 51 percent during the past 5 years. Most notable is the fast expansion of enrollment in voca- tional secondary schools, or SMK, averaging 12-14 percent annual growth since 2004/05. Public SMA and private SMK absorb the largest enrollments. Private SMA has much smaller share of enrollment, but remains important, absorbing 20 percent of the total senior secondary enrollment (Figure 2.9). Figure 2.9. Enrollment increase 2004-2009 a. enrollment by school type b. enrollment growth rate by school type (%) 2,500,000 2005/06 2006/07 2007/08 2008/09 public 3.4 6.4 7.0 5.3 2,000,000 SMA public 7.3 14.0 17.3 14.5 1,500,000 SMK private 1.8 -2.7 1.0 -1.9 SMA 1,000,000 private 1.4 4.8 12.5 12.3 SMK 500,000 2004/05 2005/06 2006/07 2007/08 2008/09 public SMA private SMA public SMK private SMK Source: MoEC, PSP. Analysis of household survey data shows the distinctive regional disparities in senior secondary school enroll- ment - its overall level, as well as the enrollment composition by type of schools. Figure 2.10 shows that Maluku Province has the highest enrollment rate, at 90 percent, of which about 90 percent of the total enrollment is in SMA3. In contrast, the total enrollment rate is only at around 50 percent in West Java Province, of which 60 of the total enrollment is in SMA, and the remaining 40 percent in SMK. Another noticeable pattern is that Central Java Province and Yogyakarta Regency (also located within Central Java) have the highest share of enrollment in vocational schools: nearly half in Central Java, and above half in Yogyakarta. Ordinary Least Square (OLS) estimates show that senior secondary school enrollment ratio is determined by both demand and supply side factors (Table 2.1). Using provincial level GER as dependent variable, the regression results show that the enrollment at provincial level is correlated with provincial junior secondary school GER, but not with provincial GDP per capita, two key variables capturing the demand-side factors. In the meantime, the number of schools per million people within a province - a key supply-side measure - is also statistically signifi- cant: the more existing schools relative to population, the higher the enrollment. Therefore, both demand and supply-side factors matter in determining the provincial level senior secondary school GER. The relatively high level of educational achievement in terms of school enrollment and national examination scores is well documented, 3 such as in EFA 2000 Assessment (World Education Forum) and ILO (2011). Further research is needed to identify the key factors that con- tribute to Maluku province’s education sector performance. Issues and Policy Agenda for Senior Secondary Education 19 Figure 2.10. Regional Disparities in senior secondary school GER (2009), by school type Jawa Barat Sulawesi Barat Nusa Tenggara Timur Papua Kalimantan Tengah Kalimantan Selatan Kalimantan Barat Kep. Bangka Belitung Banten Gorontalo Sulawesi Tengah Nusa Tenggara Barat Lampung Jawa Tengah Sumatera Selatan Jambi Papua Barat Sulawesi Selatan Jawa timur Bengkulu DKI Jakarta Sulawesi Tenggara Kep. Riau Sulawesi Utara Riau Maluku Utara Sumatera Utara Sumatera Barat Kalimantan Timur DI Yogyakarta Bali Nanggroe Aceh Darussalam SMA Maluku SMK 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Source: SUSENAS 2009. Table 2.1. OLS results: total senior secondary education GER Coefficient Standard error T P>t estimate GDP per capita 0.0000 0.0000 0.2200 0.8240 School-age population *** 0.0015 0.0005 3.0900 0.0040 SMP GER *** 0.6897 0.1703 4.0500 0.000 Figure 2.11 illustrates the above results by plotting the senior secondary school GER against junior secondary school GER, with the population size reflected by the size of the circle representing each province. Provinces with larger population tend to have lower senior secondary school GER, given similar junior secondary school GER. Figure 2.11 also divides the provinces into quadrants of four categories: provinces falling within upper and lower left quadrants still have lower than average junior secondary education enrollment, and thus policy focus should continue to on the achievement of 9-year basic education. The lower-right quadrant represents the provinces with lower than average senior secondary GER, even though their junior secondary education has better than average coverage. The policy focus can therefore start to shift towards improving senior secondary GER. The provinces in the upper-right quadrant can aim at balanced expansion at both levels. 20 Preparing Indonesian Youth for Transition How Well Does Senior Secondary Education Prepare Youth for Transition: Outcome, Access, and Equity Figure 2.11. Sr. secondary GER vs Jr. Secondary GER, by province 90 Maluku NAD Bali GER Senior Secondary 2009 80 DIY Kaltim Bubble Size= People Age 13-18 Sumbar Sumut Malut Riau Sulut 70 Sultra Kepri JKT Bengkulu Jatim Sulsel Pabar Jambi Sumsel Lampung 60 Sulteng Jateng NTB Gorontalo Babel Banten Kabar Kalsel Kalteng GER Papua Sulbar NTT Jabar 50 Fitted values 60 70 80 90 GER Junior Secondary 2009 Source: SUSENAS 2009. Comparing GER in 2006 and 2009, almost all provinces have made progress in terms of raising GER of senior secondary education, with very few exceptions (Figure 2.12). GER in West Java and Yogyakarta, for example, has more or less stayed the same. A consistent pattern across provinces is that the overall progress in senior second- ary education coverage is largely due to SMK enrollment expansion. Figure 2.12. Sr. secondary school GER, 2006 vs 2009 Gross Enrollment Rate Senior Secondary 100 90 Maluku Bubble Size= Senior Secondary Pupil 2009 GER Senior Secondary 2009 Bali NAD 80 DIY Kaltim Sumbar Sumut Riau Malut Sulut 70 Sultra Kepri JKT Jatim Bengkulu Sulsel Pabar JambiSumsel 60 Gorontalo Lampung Jateng NTB Sulteng Banten Babel Kabar GER Kalsel Kalteng Papua NTT Sulbar Jabar 50 Fitted values 40 40 50 60 70 80 90 100 GER Senior Secondary 2006 Source: SUSENAS 2006, 2009. Issues and Policy Agenda for Senior Secondary Education 21 As illustrated in Figure 2.13, between 2006 and 2009, all provinces experienced large GER growth of SMK. Many provinces actually had GER declines in SMA during this period, particularly the more populated provinces such as those on Java and Sumatra island. Figure 2.13. SMK and SMA GER: 2006 vs. 2009, provincial data Gross Enrollment Rate Vocational Secondary 50 DIY 40 GER Vocational Senior Secondary 2009 30 Bali JKT Jateng Jatim Kaltim Lampung Sulut Jabar Sumut Banten Babel 20 Sulbar Sulsel Sumbar Gorontalo Pabar Bengkulu Riau Bubble Size=Vocational Senior Secondary Pupil 2009 Sulteng Jambi Kepri Sultra Sumsel Kalsel Kalteng 10 NTB Maluku NTTKabar Papua NAD Malut 0 0 10 20 30 40 50 GER Vocational Senior Secondary 2006 Gross Enrollment Rate General Senior Secondary 80 Maluku NAD 70 GER General Senior Secondary 2009 Bubble Size= General Senior Secondary Pupil 2009 Malut 60 Sultra Kepri Sumbar Riau Bali Sumut 50 Sumsel NTB Bengkulu Kaltim Jambi Sulut Sulteng Pabar Sulsel Kabar Papua NTT Kalteng Gorontalo Kalsel 40 Jatim JKT GER Babel Banten Lampung Jateng DIY Fitted Sulbar 30 Jabar values 30 40 50 60 70 80 GER General Senior Secondary 2006 Source: SUSENAS 2006, 2009. Currently the enrollment composition by SMK and SMA varies greatly across provinces. Figure 2.14 shows the enrollment share of these two types of schools in all provinces. More populated or industrialized provinces tend to have higher shares of enrollment in SMK. What factors determine the choice of SMA versus SMK enroll- 22 Preparing Indonesian Youth for Transition How Well Does Senior Secondary Education Prepare Youth for Transition: Outcome, Access, and Equity ment? Previous studies based on household survey data have shown that the choice of SMK over SMA seems to be mostly driven by supply side factors: the relative availability of SMK versus SMA in the province or district increases a child’s likelihood of being enrolled in SMK (Chen 2008). Figure 2.14. SMA/SMK composition by province Nanggroe Aceh Darussalam Maluku Utara Maluku Nusa Tenggara Barat Sulawesi Tenggara Papua Kep. Riau Kalimantan Barat Nusa Tenggara Timur Sumatera Selatan Kalimantan Tengah Jambi Kalimantan Selatan Riau Sulawesi Tengah Sumatera Barat Bengkulu Papua Barat Sulawesi Selatan Gorontalo Sumatera Utara Sulawesi Utara Kalimantan Timur Kep. Bangka Belitung Bali Banten Sulawesi Barat Jawa timur Lampung Jawa Barat DKI Jakarta Jawa Tengah SMA DI Yogyakarta SMK 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Source: SUSENAS 2009. Provincial level data also points to the same supply side factors: the larger the SMK share among all senior secondary schools in a province, the higher the provincial SMK enrollment ratio (Table 2.2). In the meantime, the presence of private schools also seems to have a positive effect on SMK enrollment. This may be due to the fact that a majority of private schools are vocational schools, and they tend to be more actively seeking enrollment than public schools. Table 2.2. OLS of Provincial SMK GER SMK GER Coef Std Err t P>t SMP GER*** 0.4198 0.1502 2.7900 0.0090 GDP per capita 0.0000 0.0000 0.0800 0.9350 Proportion of private schools*** 0.4535 0.0800 5.6700 0.000 Proportion of SMK*** 35.3280 9.6888 3.6500 0.0010 School-age population* -0.0007 0.0004 -1.8000 0.0820 Source: SUSENAS 2009. Issues and Policy Agenda for Senior Secondary Education 23 Urban-rural and income divide is large in terms of overall enrollment in senior secondary education, and the com- position of enrollment in SMA or in SMK. Senior secondary GER in urban area is much higher (74 percent) than that in rural area (51 percent). In addition, SMK appears to be more an urban phenomenon: nearly 40 percent of the enrollment in urban areas is in SMK, compared with only less than 30 percent in rural area (Figure 2.15a). Figure 2.15. Urban/rural and income divide in sr. secondary education GER a. senior secondary GER by rural/urban b. senior secondary GER by income quintile 100% 80% 70% 80% 60% 28.3% 60% 50% 40% 15.2% 40% 30% 46.0% 20% 36.7% 20% 10% 0% 0% poorest 2 3 4 richest urban rural SMA public SMK public SMA SMK SMA private SMK private Source: SUSENAS 2009. The disparities in access to senior secondary education across household income quintile are the most distinctive (Figure 2.15b). Over 80 percent of the children from the richest 20 percent of the households can participate in senior secondary education. In contrast, only a little over 20 percent of the children from the poorest 20 percent of the households can ever get enrolled in senior secondary education. However, there is negligible difference in the distribution of the types of the schools enrolled. Private schools or vocational schools serve the rich as well as the poor. Box 2.1. Previous studies of vocational school Chen (2008) compared SMK and SMA in terms of their effects on the ability and likelihood of attaining employment; labor mar- ket earnings; and participation in tertiary education in the Indonesian context. Using a panel from IFLS 2 and IFLS 3 in 1997 and 2000, a cohort of high school students in 1997 is tracked to determine their schooling and employment status in 2000. It is found that attendance at vocational secondary schools results in neither market advantage nor disadvantage in terms of employment opportunities and/or earnings premium. Relative supply of SMK versus SMA is a key determinant of household choice of SMK. Park (2009) illustrated Korea’s experience in attempting to increase the proportion of vocational high school enrollments to 50 percent from 24 percent in late 80s and early 90s. The Korean Government promoted the expansion of freshmen enrollment in existing vocational high schools, established new schools, and to converted many general academic high schools to compre- hensive schools. After the share of vocational high school enrollment peaked in 1995 at 42 percent, it started to decrease – to 36 percent in 2000 and further to 29 percent in 2005. Park highlighted several reasons that led to this result: i) insufficient budget commitment for the construction of new schools; ii) lack of academic high schools that volunteered to become vocational high schools; iii) resistance from parents, alumni, and communities of academic high schools that were designated to be transformed to vocational high schools; and iv) opposition from teachers who were worried about the problem of oversupply of academic subjects due to transformation of academic high schools into vocational high schools. Most of these problems were not fully anticipated and discussed in the stage of policy preparation. Source: Chen (2008); Park (2009). 24 Preparing Indonesian Youth for Transition How Well Does Senior Secondary Education Prepare Youth for Transition: Outcome, Access, and Equity Supply As shown earlier in this chapter, the supply of school places has signification effect on the overall enrollment in senior secondary schools. This section tries to capture the patterns and trends of school supply. In the past 5 years, there has been nearly 30 percent increase of the total number of senior secondary schools. The number of public schools, and the number of SMK (both public and private) grow the fastest (Figure 2.16a). This is closely related to the drive started by MoEC several years ago aiming at increasing the SMK enrollment share up to 70 percent of the total senior secondary enrollment. One of the key investments has been building new SMK. This is clearly reflected in the fast growth shown in Figure 2.16b: the number of public SMK has experienced double- digit growth year-to-year for the past 5 years, compared with that of SMA growth at around 7 percent annually. Private SMK had a jump start growth between 2008 and 2009, when the expansion of SMK enrollment was highly encouraged by various policy campaigns. Figure 2.16. Increase of the number of schools (2004-2009) a. senior secondary GER by rural/urban b. rate of increase of school numbers (%) 20,000 2005/06 2006/07 2007/08 2008/09 public 15,000 8 7 6 7 SMA public 10,000 12 14 18 15 SMK private 5,000 2 5 2 4 SMA private 0 5 4 1 12 2004/05 SMK 2005/06 2006/07 2007/08 2008/09 SMA public SMA private SMK public SMK private Source: MoEC, PSP. Gaps exist in school availability to urban and rural households. IFLS shows that a majority of senior secondary schools are located in urban areas. There are no significant differences in terms of the shares of public and pri- vates school between urban and rural areas. However, compared with rural households, urban households tend to mention SMK more frequently when being asked about their knowledge on the availability of senior second- ary schools (Figure 2.17). This is consistent with the enrollment data derived from SUSENAS, showing higher enrollment of urban children than rural children in SMK. Figure 2.17. % of the most-mentioned sr. secondary schools by household 100% 90% 80% 70% rural 60% urban 50% 40% 30% 20% 10% 0% SMA SMK Source: MoEC, PSP. Issues and Policy Agenda for Senior Secondary Education 25 Identifying school-going behavior of households is important for the planning of the expansion of school supply. IFLS data shows that households rarely go out of provincial boundaries for senior secondary schooling. In addi- tion, over 87 percent of the households choose schools within their districts (kabupaten), among which nearly 60 percent stay in the same sub-district (kecamatan) (Figure 2.18). These patterns make future school supply planning somewhat easy as education service delivery largely falls under the mandate of local governments at district level. Given that “cross-border� school attendance in adjacent districts still exists, involving local govern- ments within province is also essential for coordination. Figure 2.18. How far from home to attend a senior secondary school different province 58.9% same province but different kabupaten 11.3% 87.4% same kabupaten and same kecamatan 1.3% same kabupaten but different kecamatan 5.1% 36.0% same kabupaten but don't know kecamatan Source: IFLS 4 Demand There is clear indication that the demand for attending senior secondary schools is not fully met currently. Ac- cording to the records from schools on the application and admission data, all types of schools have more ap- plications than what the existing school places can accommodate (Figure 2.19). Public schools are generally most desirable. The recent expansion of public SMK seems to reduce the application/admission ratio slightly, but the ratio is still at around 3:2 by school year 2008/09. Private schools absorb a significant proportion of excess demand, with application/admission ratio close to 1. But even in private schools this ratio is on the rise in recent years, particularly for private SMK. Figure 2.19. Application/admission ratio, 2004-2009 2.0 1.9 1.8 1.7 public SMA 1.6 public SMK 1.5 private SMA 1.4 1.3 private SMK 1.2 1.1 1.0 2004/05 2005/06 2006/07 2007/08 2008/09 Source: MoNE, PSP 26 Preparing Indonesian Youth for Transition How Well Does Senior Secondary Education Prepare Youth for Transition: Outcome, Access, and Equity Given that a majority of households stay within province for senior secondary attendance, Provincial level differ- ences in application/admission ratio can indicate where the expansion of school places is most needed. Figure 2.20 shows that in school year 2008/09, a majority of provinces have higher application/admission ratio for SMK than for SMA. North Maluku, Riau, and West Nusa Tenggara have the highest ratio of over 2:1 on average. Very few provinces have higher application/admission ratio for SMA – Jakarta and South Kalimatan stand out. Figure 2.20. 2008/09 application/admission ratio, by province Nanggroe Aceh Darussalam Maluku Utara Maluku Nusa Tenggara Barat Sulawesi Tenggara Papua Kep. Riau Kalimantan Barat Nusa Tenggara Timur Sumatera Selatan Kalimantan Tengah Jambi Kalimantan Selatan Riau Sulawesi Tengah Sumatera Barat Bengkulu Papua Barat Sulawesi Selatan Gorontalo Sumatera Utara Sulawesi Utara Kalimantan Timur Kep. Bangka Belitung Bali Banten Sulawesi Barat Jawa timur Lampung Jawa Barat DKI Jakarta Jawa Tengah public SMA DI Yogyakarta public SMK 0.0 0.5 1.0 1.5 2.0 2.5 Source: MoNE PSP. Issues and Policy Agenda for Senior Secondary Education 27 In summary, there is clear evidence that the demand for senior secondary education is on the rise, and has surpassed the expansions in supply in Indonesia in recent years. Further public investment in expanding ac- cess, however, needs to give greater attention to narrowing the disparities between provinces, rural and urban areas, and households with different socioeconomic status. Improving learning achievement and labor market outcome has to be put at the center of any reforms at senior secondary level, and necessarily starts at the lower cycles of schooling. Without significant improvement in quality, any investment, whether it is from public or pri- vate source, will not get its full value. The quality improvement should also aim at narrowing the gaps between public and private schools – reducing the sorting effect and giving low performing student opportunities to catch up and close the learning gaps. The debate on the optimal ratio between SMA and SMK will continue. The currently higher desirability of SMK by households seems to be derived from the perception of immediate employability upon graduation. As Indone- sia’s economy grows and technologies advance, demand for wider academic base for more advanced learning and skills development will rise, as reflected by other countries’ experience. Balancing SMA and SMK is therefore a dynamic process, and requires a system with great flexibility and adaptability. 28 Preparing Indonesian Youth for Transition III. Are Schools Prepared? School Inputs, Resources, and Governance Improving the quality of senior secondary education cannot succeed without good quality schools, the frontline of teaching and learning. Knowing the conditions and understanding the challenges is the starting point of a roadmap to future improvements and reforms. A wide range of school characteristics are relevant to educational quality. First and foremost is an adequate supply of qualified teachers who are motivated to work. Other tradi- tionally valued educational inputs include teaching and learning materials, and the conditions of classrooms and supporting facilities, including laboratories and ICT facilities. Curriculum, which provides a blueprint for teaching and learning, is a key determinant of education quality. However, it is often not its design, but its implementation that poses more challenges. Overall financial resource available to schools is an important factor that affects the quantity and quality of these educational inputs. This chapter will focus on these school inputs and further relates these inputs to school financing issues4. Indonesia’s private secondary schools particularly face challenges in this regard. Unlike those in more advanced economies, only very few private schools in Indonesia are elite schools. The majority caters the excess demand by providing school places to those who do not score high enough in national examinations to compete for lim- ited public school places. Therefore, most private schools get lower-performing students to start with. Qualified teachers also tend to be teaching at public schools, with secured posts in civil service – a highly sought status among Indonesian teachers. The divide between Indonesia’s public and private schools in terms of school inputs and resource can easily be detected as illustrated in the analyses in this chapter. A. Teachers There is global evidence that the quality of education cannot exceed the quality of teachers. Indonesia’s 2005 Teacher Law aimed to improve the quality of the Indonesian education system by addressing the weaknesses in teacher competencies, their low motivation and poor levels of pay. Teachers are required to be certified with demonstrated professional competency. It is expected that by 2015, all active teachers should be certified. Strong incentives were also introduced which entitled certified teachers to a professional allowance equivalent to their basic pay. Since 2005, approximately one million teachers, or about one-third of the total teaching force, have been certified. The immediate value of certifying in-service teachers is perceived as improving their morale and upgrading their knowledge and skills. In the longer term, the effect of higher qualification requirement together with higher compensation is expected to be more significant in terms of attracting high caliber people into teaching profession. Teacher availability is not of concern in Indonesia. As a matter of fact, Indonesia’s teacher supply can be charac- terized by the over-supply of teachers but shortage of qualified teachers. Chen (2009) uses a theoretical frame- work of government-dominated market with government-set wage rate and demand for teachers to examine how teacher supply, particularly the composition of the teaching force with low or high qualification, would be determined by current and future public policies. Using 2001 to 2008 Indonesian Labor Force Survey data, it is found that the relative wage rate of teachers and that of alternative occupations significantly influence the deci- sion of college educated workers to become teachers. It is also found that the wage rate set by the 2005 teacher law would increase the share of teachers in the college-educated labor force. With the currently large size of teaching force, the student-teacher ratio is quite low across all types of schools in Indonesia. One pattern emerging as illustrated in Figure 3.1 is the large differences between student-teacher ratio and class size, an indication that teachers may not be fully utilized in terms of total working hours. The current Teacher Law stipulates that the standard working hours for teachers is 24 hours per week, which is quite low by international standard. In reality, the actual number of working hours of Indonesian teacher is even lower. Unless otherwise indicated, the analyses in this section use the school survey accompanied by the IFLS 4. The schools in the sample repre- 4 sent the most frequently mentioned schools by households, not a geographically representative sample of schools nationwide. 30 Preparing Indonesian Youth for Transition Are Schools Prepared? School Inputs, Resources, and Governance Figure 3.1. Student-teacher ratio and class size, by school type 40 40 35 38 37 30 32 25 student teacher ratio 20 student classroom ratio 15 14 14 10 12 11 5 0 public general public vocational private general private vocational secondary school secondary school secondary school secondary school Source: IFLS 2007-08 The qualifications of Indonesia’s senior secondary school principal’s and teacher’s, as measured by their academic background, are generally good. A majority of principals and teachers have either Bachelor’s degree or Master’s degree. There are not significant differences in qualifications between principals and teachers in private and public schools, except that a larger proportion of principals in public schools have Master’s degree (Figure 3.2). Figure 3.2. Principal and teacher qualification a. principal b. teacher 100% 100% 90% 90% 80% 80% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% public general public vocational private general private vocational public general public vocational private general private vocational secondary school secondary school secondary school secondary school secondary school secondary school secondary school secondary school master D1-D2 teaching PhD D1-D3 teaching S1 teaching general senior secondary master vocational senior secondary S2 non teaching primary S1 teaching D1-D3 non teaching S1 teaching general senior secondary Source: IFLS 4. Issues and Policy Agenda for Senior Secondary Education 31 One difference that exists between private and public school teachers is the teaching tenure (Figure 3.3). Public school teachers on average have 3 more years of teaching experience than private school teachers. This dif- ference is not large, but statistically significant. This may reflect the slightly higher teacher turnovers at private schools, as well as the fact the some teachers who start their teaching career at private schools eventually find jobs at public schools, as civil servant teachers, with better pay and better job security – a much preferred option by almost all Indonesian teachers. Figure 3.3. Years of teaching by school type 20 15 16 15 10 12 13 5 0 public general public vocational private general private vocational secondary school secondary school secondary school secondary school Source: IFLS 2007-08 The most worrisome finding is that a significant proportion of Indonesian secondary school teachers have sec- ond jobs, particularly private school teachers. Figure 3.4 shows that nearly a quarter of public school teachers, and close to half of all private school teachers have second jobs. Some of these second jobs can be teaching in other schools. Our data cannot distinguish between teaching and non-teaching jobs in private employment. However, given the very low student-teacher ratio nationwide, it is likely that a majority of these private employ- ment jobs are non-teaching jobs. Teachers from public vocational schools are the most likely to work simultane- ously as private employees, while a significant share of all teachers work as self-employed as well. Figure 3.4. Percentage of teachers with 2nd job, and type of 2nd job a. % of teacher with 2nd job b. type of 2nd job 50% 100% 90% 45.5% 80% 40% 42.7% 70% 60% 30% 50% 40% 20% 24.5% 30% 23.9% 20% 10% 10% 0% public general public vocational private general private vocational secondary school secondary school secondary school secondary school 0% casual workers in non agriculture D1-D2 teaching public general public vocational private general private vocational S1 teaching general senior secondary secondary school secondary school secondary school secondary school S2 non teaching primary Source: IFLS 4. 32 Preparing Indonesian Youth for Transition Are Schools Prepared? School Inputs, Resources, and Governance The workload for the main teaching job is light, and working hours short for a majority of teachers. On average, a general secondary school teacher works 16-17 hours per week for their main teaching job. Vocational school teachers work slightly longer hours, around 20-22 hours per week (Figure 3.5) The difference may be the result of the relatively smaller number of vocational subject teachers overall. There is no difference in teaching hours between public and private school teachers. Overall, teachers in all types of schools spend less than 24 hours per week at their main teaching job – a minimum level that is stipulated by law. Figure 3.5 also shows that teachers spend significant time on their second jobs. Probably because of the advan- tage of possessing specific vocational skills, vocational school teachers tend to work longer hours on the second jobs than general or academic school teachers. On average, they spend 7-9 hours per week on their second jobs, compared to 2-4 hours of their peers at general secondary schools. Private school teachers tend to work slightly longer hours at their second jobs, probably a result of the low pay from their main teaching job. Figure 3.5. Working hours: teaching and 2nd job 35 30 9.3 25 7.1 20 2.7 3.5 hours spent per week 15 on other jobs 20.0 21.7 hours spent per week 10 17.0 16.4 on teaching at this school 5 0 public general public vocational private general private vocational secondary school secondary school secondary school secondary school Source: IFLS 4 With the pay increase and the emphasis of minimum 24 working hours per week of certified teachers, the imple- mentation of teacher certification following the 2005 Teacher Law does seem to have reduced the proportion of teachers holding second jobs and reporting financial difficulties. De Ree (2012) has found that among primary and junior secondary school teachers, the magnitudes of these effects are substantial. Certification can cause a 27 percentage point decrease in the likelihood of having a second job. Figure 3.6 shows the large pay gaps between public and private school teachers. Private school teachers are paid much less than public school teachers: only half of the amount on average. Private schools teachers, however, do have more earnings from their second jobs. Nonetheless, even with a quarter to a third of their income from other jobs, private school teachers’ total take home pay is much lower than that of public school teachers. At 2007/08 price, the average monthly income of a private school teacher is just above Rp 1 million, or a little over US$100. Public school teachers, on the other hand, can earn close to Rp 2 million, or US$200 per month. Teacher certification started in 2005 has likely made significant impact on teacher’s salary structure today. Certi- fied teachers are entitled to have their salary doubled. By end of 2011, a significant proportion of senior second- ary school teachers have been certified. However, the certification priority given to public school teachers also likely to have increased the pay gap between public and private school teachers. This dual compensation system can exist largely because that the inspiration of many private school teachers is to become public employees, Issues and Policy Agenda for Senior Secondary Education 33 teaching in either public or private schools, which would give them better job security and pay eventually. While this situation may lead to the lowered average teacher pay and seemingly lower cost of service delivery for the time being, it also creates a constant pressure to continuously enlarge the civil-service size, and eventually results in an unsustainably low student-teacher ratio and much larger teacher salary bill as a whole. Figure 3.6. Teacher monthly income from teaching and 2nd job 2,000,000 1,500,000 1,000,000 monthly income from other jobs monthly income from 500,000 teaching at this school 0 public general public vocational private general private vocational secondary school secondary school secondary school secondary school B. Textbooks Textbooks availability is not of concern in a majority of Indonesia’s senior secondary schools. Almost all students have access to textbooks of core subject, with 1:1 student:textbook ratio. Purchasing textbooks is still common even though MoEC has made electronic textbooks available for downloading online. This may reflect the fact that the infrastructure has not been able to keep up to make internet downloading easy for many schools. Figure 3.7. Source of textbooks 100% 90% 80% obtain outside school 70% obtain from siblings purchase outside school 60% purchase from school 50% make photocopies 40% borrow from school 30% obtain free copies 20% 10% 0% public general public vocational private general private vocational secondary school secondary school secondary school secondary school 34 Preparing Indonesian Youth for Transition Are Schools Prepared? School Inputs, Resources, and Governance C. School infrastructure Classrooms at senior secondary schools do not seem to be in shortage to accommodate the admitted students. In other words, schools do not crowd their classrooms to accommodate all demand. However, rain water and leak seem to be more common problems that schools have to face from time to time (Table 3.1). Table 3.1. Conditions of classrooms and sanitary facilities at schools (%) Classroom Classroom Classroom Classroom Classroom ever lost Substitute experi- Toilet Running Toilet Running experi- experi- using electrical electric- enced available water in available water in enced enced electrical power and ity source problems for teach- teacher for stu- student problems problems lighting disrupt the available with flash ers toilet dents toilet with leak with flood study rain Public General 93.8 14.8 34.2 9.9 2.6 8.4 99.6 90.2 99.3 89.3 Secondary School Private General 89.3 9.4 33.3 12.9 3.9 15.7 97.2 89.7 96.6 87.6 Secondary School Public Vocational 91.5 16.9 27.3 12.7 2.8 14.1 100.0 98.6 98.6 97.1 Secondary School Private Vocational 91.1 13.7 28.6 10.7 3.6 10.7 95.5 95.0 99.1 96.4 Secondary School One key shortage in school infrastructure is of laboratories. Figure 3.8 shows that computer labs are becoming more common now, but a majority of schools do not have labs for core subjects such as chemistry, biology, or lan- guage. Even though lab shortage is common, public schools are better equipped in general than private schools. Figure 3.8. Percentage of schools with labs, by subject 100% 80% 60% 40% 20% 0% library computer laboratory: laboratory: laboratory: multimedia language laboratory physics biology chemistry room/ laboratory laboratory public general secondary school private general secondary school Issues and Policy Agenda for Senior Secondary Education 35 D. Curriculum Since 1984, the curriculum reform in Indonesia has spoken of “overloaded� curriculum, but the senior secondary curriculum in Indonesia remains one of the most overloaded in the world today. Following the international trend at the time, the 1994 curriculum began the curricular decentralization process, but other than a small amount of “local content,� up to 20 percent at lower levels and 5 percent at the senior secondary level, the cur- riculum remains predominantly centralized phenomenon in Indonesia. There is still no room for elective courses, with the exception of electing which stream (such as natural science, social science or language streams) to enter at grade 11. Figure 3.9. Curriculum in senior secondary schools 100% 80% 60% 40% KTSP Curiculum: 2004 20% 0% public general public vocational private general private vocational secondary school secondary school secondary school secondary school Source: IFLS 4 In 2002/2004, a competency-based curriculum was introduced, theoretically based on the knowledge, skills and values needed for success in contemporary Indonesian society. As with the other reforms, while standards or competencies, benchmarks and other components of a standard-based curriculum can be found in many cur- riculum documents, too many are stated as broad goals and are seldom put into practice in the classroom or are carefully assessed to assure that students have actually attained the stated competence. Figure 3.9 shows that a majority of senior secondary school today has adopted the latest “Education Unit Level Curriculum� (Kurikulum Tingkat Satuan Pendidikan, KTSP) started in 2005. By design, KTSP is characterized by the achievement of packages of competencies rather than on subject matter, including individual student compe- tencies and learning outcomes, together with a variety of approaches and methods, use of sources, and new assessments processes and procedures to assure the attainment of these competencies. These admirable goals remain to be put into practice. The implementation of KTSP at school level remains primarily an “input model,� with required courses to be taken, number of hours of class to be held, topics to be covered, and credits to be given. High-stake testing at the completion of junior and senior secondary primarily rewards the memorization of information, rather than the stated curriculum goals of “creativity, higher order thinking skills, mastery of com- petencies or vocational competence.� A fundamental difference between KTSP and previous competency-based curricula (2002 and 2004) was that schools were to be given full authority to plan for education to meet the standards that had been set, to structure the goal, the vision and mission, define the methods of learning, set the school calendar, and develop syllabi. So far there appears to have been little actual experimentation at any level with the implementation of this decen- tralized vision of KTSP. 36 Preparing Indonesian Youth for Transition Are Schools Prepared? School Inputs, Resources, and Governance E. School financial resource Disparities are large in terms of resources available at school level. Resources available to public schools (includ- ing teacher salaries) are nearly twice as much as those at private schools (Figure 3.10). One key source of this dif- ference is the payment for teacher salaries. Central government’s non-salary spending in the form of direct school subsidy benefits private and public schools equally. However, local government’s direct subsidy mostly benefits public schools. Public schools actually charge higher school committee fees, while private schools have “other� sources of funding, which can be from private foundations or other ad-hoc fees from parents5. Even though SMK has slightly higher per pupil spending in general, the larger resource difference lies between public and private schools. These resource differences are consistent with the input quality differences as presented in the previous chapter, particularly in terms of teacher compensation differentials. Figure 3.10. School level spending per student per year 2,500,000 2,000,000 u_other u_donation 1,500,000 u_committee u_routine u_bop 1,000,000 u_grant u_bos 500,000 0 public general public vocational private general private vocational secondary school secondary school secondary school secondary school Source: IFLS 4 Effective schools generally require the right combination of trained personnel, appropriate curricula, adequate facilities and teaching and learning materials. A word of caution is that research usually shows a weak relation- ship between educational resources and student performance, with more variation explained by the quality of human resources (i.e. teachers and school principals) than by material and financial resources (Fuller, 1987; Rivkin, Hanushek and Kain, 2005). The generally weak relationship between resources and performance is also seen in PISA. At the level of the education system, accounting for the level of national income, the only type of resource that PISA shows to be correlated with student performance is the level of teachers’ salaries relative to national income. Within school systems, only 5 percent of the variation in student performance is attributable solely to the differences in the educational resources to the schools. In contrast, 18 percent of the variation in student performance is attributable jointly to spending on education and the socio-economic and demographic back- ground of students and schools (OECD 2010). Private schools have a tendency to charge other ad-hoc fees for a variety of school activities throughout the year. From household’s per- 5 spective, attending a private school still costs more. See Chapter 4 for details. Issues and Policy Agenda for Senior Secondary Education 37 There are two distinctive lessons that Indonesia’s senior secondary school system can learn from these compara- tive results. First, with similar level of spending, priority should be given to teacher quality rather than quan- tity. Learning performance can potentially gain from the trade-off between higher teacher salaries and lower student-teacher ratios. Second, the achievement gap between public and private school students cannot be closed by narrowing the resource gap alone. The effort needs to start from addressing the issue of sorting high and low performing students into different schools, and narrowing the learning gaps between students of differ- ent socioeconomic background at lower cycles of education. 38 Preparing Indonesian Youth for Transition IV. Is the System Prepared? Governance and Financing How school inputs and resources can be translated into outcomes will depend on a range of systemic factors, among which a governance system with strong accountability focus is crucial. How such system can work is further affected by how the system is financed, in other words, how the public and private funding is accounted for in terms of producing learning outcome and narrowing inequalities. This chapter provides a snapshot assess- ment of the current institutional arrangement of Indonesia’s education governance and financing system. While the focus is on senior secondary education, most of the analyses also apply to the overall education system in Indonesia. World Bank (2007) provides a useful framework to identify individuals and institutions affecting educa- tion service delivery, the key functions of an education governance system, and the reform needs for an educa- tion system that is geared towards better performance. A. Governance The education governance system in Indonesia can be assessed in the following key areas: performance stan- dards, assessment, and reporting; impact evaluation of education policies and programs; requirement for schools to operate; and autonomy and accountability. Performance standards, assessments and reporting Indonesian Government’s Regulation No. 19 of Year 2005 sets up the framework of the National Education Stan- dards. The framework includes 8 dimensions: (1) content standards; (2) process standards; (3) graduate compe- tency standards; (4) teacher and personnel standards; (5) facilities and infrastructure standards; (6) management standards (7) financing standards; and (8) assessment standards. Between 2006 and 2009, numerous ministerial regulations were issued describing these standards in great details6. The general sentiment among Indonesian educators and general public on these national standards is that they are mostly beyond reach in many schools in Indonesia. They are regarded as more inspirational than operational. In order to provide a set of standards that schools can actually measure themselves, the “Minimum Service Stan- dards� (MSS) have been developed since 2004. Some examples of the content of draft MSS is presented in Table 4.1. Up to now, the MSS have not been turned into government regulations, and they are yet to be tested on the ground. The debate on the content of MSS continues. One distinctive critique on these “static� standards is that there are many schools that for reasons of poverty, parental education, remoteness, and a range of other factors, are below these standards. While striving for performing heroically, they may remain below MSS for some time to come. It is important that schools be judged as having made genuine and important progress and be rewarded in some manner. Another legitimate critique is that some standards seem to go against the trend following the sector progress over time. For example, with enrollment increasing, dropout rate will likely to rise. This pattern has been seen in developed countries. For example, in the United States, most of its 16 year old young people are enrolled in school. However, its graduation rate nationwide is only 73 percent, and many urban systems graduate less than 50 percent of the age group. Rather than setting an arbitrary 1 percent drop-out rate, it would be of much greater value if a set of realistic academic or practical competency goals were set, and schools are measured against progresses towards these goals. See www.bnsp-indonesia.org for a complete list and full content of the regulations. 6 40 Preparing Indonesian Youth for Transition Is the System Prepared? Governance and Financing Table 4.1. Draft minimum standards for senior secondary education No Current MSS Indicator a. 60 percent of youths in the age group 16-18 attend SMA/MA’s b. The drop-out rate doesn’t exceed 1 percent of the number of students who go to school 90 percent of schools have the minimum facilities and infrastructure to meet the nationally set techni- c. cal standards 80 percent of schools have non-teaching staff to run administrative tasks and other non-teaching d. activities e. 90 percent of schools have the required number of SMA/MA teachers 90 percent of SMA/MA teachers have the qualifications which meet the nationally set competency f. standards g. 100 percent of students have complete sets of textbooks for every school subject h. The number of students per class in SMA/MA’s comprises 30-40 students per class 90 percent of students who have participated in quality sampling tests of national standard educa- i. tion, have achieved “satisfactory� scores in English, Geography, Basic Mathematics for classes I and II j. 25 percent of SMA/MAs graduates continue their study to accredited Universities The MSS are heavily input-focused, however they lack clear standards for teacher quality performance – the most important educational input. International studies on trade-offs between teacher quality and quantity have shown that it is more critical that teachers be appropriately certified and expert in their subject matter and pedagogical knowledge, and have incentives for good performance, than it is to have a fixed number of teachers. Size of class in senior academic secondary is not as critical as in the early grades of primary. In fact, international research has found that there is little difference in most settings between 20 and 40 students. The stipulation of the learning outcome standards is also not straightforward: What are the “satisfactory scores�? Why only in English, Geography and Basic Mathematics in classes I and II? What are the “quality sampling tests�? What about students who are not sampled? In terms of transition to higher education, what percentage of stu- dents should continue to higher education depends on the stages of economic development and needs of a society. In addition to the seemingly arbitrary 25 percent transition rate, this outcome standard seems to exclude transitions to a range of non-university tertiary institutions such as polytechnics, community or junior colleges that may be some of the best places for a large percentage of secondary graduates, where sufficient “technician� level human resources can be produced for the economy. Most importantly, for the MSS to be useful in practice, they need to be closely related to accountability. The current MSS seem to mix performance goals at school level and other administrative levels (either district or provincial level). For example, the 60 percent participation rate of senior secondary schools can neither be a sole responsibility, nor a relevant measure at individual school level. Transition to tertiary education also depends on the availabilities of tertiary institutions. Whose ultimate responsibility it is in terms of school infrastructure development is also unclear. Currently, neither National Education Standards nor Minimum Service Standards are systematically enforced, regularly assessed, and reported. Nationwide student assessments are carried out at the end of education cycles, mostly for graduation certification and selection of students to the next cycle, but not for accountability purpos- es. There are no other established external assessments for monitoring and reporting the outcomes of student performance or average school performance. Teacher evaluation is currently going through the “certification� process, but continued performance evaluation of teachers has not been in place. Issues and Policy Agenda for Senior Secondary Education 41 Impact evaluation of education policies and programs In Indonesia, even though there have been some donor-supported impact evaluations of educational policies (e.g. teacher certification, community grant to support early childhood development, and school-based man- agement), mechanisms have yet to be formally established for evaluating the impact of education policies and programs. The R&D arm of MoNE (“Batlitbang�) currently does not have sufficient funding and human capacity to design and implement rigorous impact evaluation of education policies and programs. Requirement to operate and accreditation With the fast growth of new senior secondary schools, maintaining adequate school operational requirement is the first line to assure service delivery quality. Since decentralization, district local government has been the main responsible government agency for establishing new public schools and granting permit to the operation of private schools. Registering private schools and maintaining operation requirement is becoming more chal- lenging, as the number of schools is growing, with many schools going through frequent changes over time to adapt to the demand. Once schools start operation, they are required accredited and given accreditation ratings from A to C. School accreditation has continued to be implemented centrally by the National Accreditation Agency (BAN) and its branch offices. The set of accreditation instruments are aligned with the National Education Standards in 8 areas. BAN’s capacity is at present severely constrained. Many schools have been given an accreditation rating at one point in time, which are rarely updated. Autonomy and accountability In 2003, the Indonesian government began to decentralize the governance of its primary and secondary edu- cation system as part of its decentralization of responsibilities to district governments, initiated to strengthen the country’s democratic processes. While local government has started to assume expanded roles in service delivery, the limited capacity has constrained their full function. For example, the ultimate authority of hiring civil service teachers (pegawai negeri sipil, PNS) remains at the central government under the Civil Service Board, and financed by the central government budget transfer. In addition, the Institute for Assuring the Quality of Edu- cational Personnel (Lembaga Peningkatan Mutu Pendidikan, LPMP) with locations in various provinces remains a central institution under MoEC. One of the most significant developments in decentralizing service delivery is at school level. Schools were given broad authority to design, implement, and manage their educational programs and classroom instruction in accordance with local social norms and culture. Although the operational authority was devolved to schools, schools were also mandated to establish an advisory school committee (SC) whose functions include giving in- put on school educational policy and programs, budget plans, and teacher training; increasing society’s attention and commitment to quality education; motivating parents to participate in their children’s education; collecting money in support of education; and supervising educational policy and program implementation. To promote transparency, SC members were to be elected and broadly representative of the community. Schools were directed to formulate vision, mission, and goals on “the basis of inputs from all stakeholders includ- ing the SC and decided by a teaching board meeting chaired by the principal� and to develop a four-year and an annual plan, the latter to be approved by the teaching board and subject to the input of the SC. Monitoring of school management was to be exercised by the SC on a regular and continuous basis, and supervision over academic management was to be exercised by the principal and the district. The education district’s role was limited to validating the plans and coordinating and supervising the development of their schools’ curriculum. 42 Preparing Indonesian Youth for Transition Is the System Prepared? Governance and Financing The IFLS school survey shows that schools have since played important roles in decision making: notably in non-PNS teacher hiring, student affairs, school maintenance, textbooks selection, and local content in curriculum (Figure 4.1). However, central government influence is still strong particularly in setting teacher salary standards, and in other areas of teacher management including teacher certification. Figure 3.10. School level spending per student per year a. public school 100% 80% other 60% school 40% local gov. central gov. 20% 0% textbook curiculum local hiring of hiring of hiring of salary of salary of salary of student school certifying selection content permanent contract honoraria permanent contract honoraria admission building teachers curiculum teacher teacher teacher teacher teacher teacher fees maintenance b. private school 100% private/ 80% foundation school 60% local gov. 40% central gov. 20% 0% textbook curiculum local hiring of hiring of hiring of salary of salary of salary of student school certifying selection content permanent contract honoraria permanent contract honoraria admission building teachers curiculum teacher teacher teacher teacher teacher teacher fees maintenance Source: IFLS 4 The relations between school autonomy and performance are quite nuanced according to cross-country analy- ses. PISA results suggest that the prevalence of schools’ autonomy to define and elaborate their curricula and assessment relates positively to the performance of school system, even after accounting for national income. School systems that provide schools with greater discretion in deciding student-assessment policies, the courses offered, and course content and the textbooks used are also school systems that perform at higher levels in reading. In contrast, the relationship is less clear when the autonomy concerns school resources allocation such as hiring and firing teachers, determining teacher salaries, formulating school budget, and deciding on budget allocations within the school. Nonetheless, within countries, the relationships between the autonomy of schools in allocating resources and learning outcomes are related to system’s accountability arrangements in important ways. For example, infor- mation on the results of external examinations and assessments often provides an important framework for the autonomy of schools by providing a basis for schools and parents to make appropriate decisions for students (Fuchs and Woessmann, 2008). Data from PISA show that in school system where most school post achieve- ment data publicly, there is a positive relationship between school autonomy in resource allocation and student performance. In short, school autonomy in allocating resources tends to be associated with good performance in those education systems where most schools post achievement data publicly. This suggests that it is a com- bination of several autonomy and accountability policies, not just a single isolated policy, that is related to better student outcomes (Figure 4.2). Issues and Policy Agenda for Senior Secondary Education 43 Figure 4.2. 2009 PISA reading score by governance characteristics 500 498 496 498 494 492 495 493 490 488 486 489 484 482 480 more autonomy less autonomy more autonomy less autonomy system with more accountability system with less accountability Source: OECD (2010). The accountability arrangement is particularly weak in Indonesia’s school system, starting from standards setting to assessments and consequences. Local education officers inspect schools, but it rarely brings any real conse- quences, and the feedback to schools is not often useful in improving teaching and learning, as viewed by teach- ers. Principals do perform teacher assessment, but it lacks valid student assessment tools, and does not lead to rewards or sanctions. The deficiency in accountability of schools (particularly the downward accountability to communities and parents) seems to be rooted in Indonesia’s current regulatory framework. Legally speaking, the public schools in Indonesia are not autonomous. Schools are categorized as “technical units� in the government bureaucratic system, following the same budgeting and reporting procedures as a government office. A law was drafted on “education entity� in 2009 aiming at granting all schools autonomous status, but it did not receive parliament support, and was eventually cancelled. The capacity of teachers and schools also need to be much strengthened in order for the autonomy-account- ability nexus to work effectively. A recent World Bank study on school-based management (SBM) in Indonesia (World Bank, 2012) found that principals, teachers, and school committee members had insufficient understand- ing of what SBM required of them and of the functions attributed to the school committee. For instance, they understood SBM’s theory and overall purposes (school autonomy, community participation) but not necessarily the responsibilities and the required actions they implied. Most principals and school committee members had some misconceptions regarding the functions of the school committee. In addition, a majority of principals said that they were not well prepared to provide effective leadership and perform such SBM-related activities as formulating a vision for school staff, developing a plan for school academic improvement, and making decisions on school curriculum. Similarly, a majority of teachers reported they were not well prepared to plan effective lessons and use various instructional methods and, hence, were unprepared to try alternatives to their routine instructional practices. District staff members, including supervisors, were even less positive about principal and teacher preparedness. Without the strong capacity of teachers and schools to implement policies and practices, and their understand- ing and agreement on what the students need to know and should be able to do, pushing authority down to school level can be counterproductive. Indonesia’s success in building a strong education governance system will depend greatly on creating and executing a plan that produce the maximum coherence of the system. Decentralization in Indonesia has provided an overall vision of local control of education service delivery. The overall accountability arrangement and quality assurance will need a clearer definition of responsibilities across agencies, with separated but much strengthened functions in oversight, measurement, reporting, policy and programming, together with an effective mechanism to introduce accountability from local to the central level. 44 Preparing Indonesian Youth for Transition Is the System Prepared? Governance and Financing B. Financing The financial commitment of Indonesian government to education, including senior secondary education, in- creased substantially over the past several years. Indonesia’s constitution stipulates that 20 percent of the total Government expenditure should go to education. The enforcement of the 20 percent allocation that started in 2008 has resulted in significant increase of public resources to education. While the emphasis of public spend- ing has been on the achievement of 9-year universal basic education in the past few years, key policies start to emerge to move towards the expansion of senior secondary education. Recently, MoEC announced the new policy of compulsory 12-year education, to be gradually rolled out towards achieving universal 12-year education by 2014. This policy follows the increasingly common concerns that Indonesia does not have a sufficient num- ber of skilled young workers to meet the need of the labor market for accelerated economic growth. With the backdrop of these concerns and policy debates, this section attempts to look into the key financing issues facing Indonesia’s senior secondary education: whether Indonesia is investing sufficient public resources on senior sec- ondary education; whether public resources are used equitably and effectively, particularly in terms of the large spending item such as teacher’s salary bill; and how much households contribute to financing senior secondary education, and whether it is affordable and sustainable. Overall public financing Currently, public spending on senior secondary education in Indonesia is on the low side. This can be seen from comparing the public spending per student at this level across a few developing and developed countries. Fig- ure 4.3 shows that on average Indonesia spends about 12 percent of its GDP per capita on a senior secondary school student. This is lower than developing countries’ average of 17.3 percent, and developed countries’ aver- age of 22.3 percent. This level of public spending is equivalent to about US$300 per student, inclusive of teacher salaries. Figure 4.3. Public current expenditure on secondary education per pupil as % of GNP per capita 60 50 40 30 20 10 0 Indonesia Mongolia Colombia Brazil Singapore Bangladesh Chile Jordan Australia Turkey India Developing countries Malaysia New Zealand Republic of Korea Argentina Poland Developed countries Cuba Source: OECD (2010). Issues and Policy Agenda for Senior Secondary Education 45 Within this amount, we estimate that only around 50 percent or less flow to schools directly in the form of paying teacher salaries (as often categorized as “routine� spending by school’s accounting book), together with other dif- ferent forms of cash subsidies to schools (e.g., “BOS� as central government grant, and “BOP� as local government grant). According to IFLS’s school survey in 2007-2008, a public senior secondary school received approximately US$200 per student, while a private school received around US$30. The spending that does not flow to schools represents the portion that stayed at central or local government level which was spent on behalf of schools, or for administrative purposes. Teacher salaries A World Bank study (2009c) shows that Indonesian teachers are on average paid less than workers with similar academic background. The teacher certification started in 2005 has introduced teacher “professional allowance�, which doubles the salaries of certified teachers. With the implementation of teacher certification more than half way through, it seems that teacher’s nominal salaries have indeed increased at the aggregated level. In particular, the nominal salaries of teachers have been able to increase faster than workers with comparable background. However, after inflation is accounted for, the real salaries of teachers remain the same (Figure 4.4) (while the real salaries of their counterparts decreased). Figure 4.4. Senior secondary school monthly salary 2,000,000 1,500,000 1,000,000 nominal 500,000 2005 price 0 2005 2010 Source: OECD (2010). As multiple of GDP per capita, Indonesian teachers’ average salary level is about 0.8 (or 80 percent) of GDP per capita, lower than Asian countries’ average of 1.8 or Latin American countries’ average of 1.9 (Carnoy and Wel- mond, 1996). Nonetheless, the large number of teachers relative to students, or low student-teacher ratio, still leads to the large salary bill for teachers, even though the average salary level remains relatively low. As illus- trated in the previous chapter, there could be potential gains in system performance from trading-off teacher quality and quantity. In other words, with total teacher salary bill constant, the system will be better off in terms of producing learning performance if the public spending can be reallocated to raising salaries to attract better teachers and in the meantime to weed out the unqualified teachers. Equity and household expenditure Given that the enrollment at senior secondary education level is highly biased towards children from socioeco- nomically better-off households and from urban areas, public spending at this level therefore disproportionally benefits the relatively advantaged population groups. Public spending on education has largely been emphasiz- ing more on “uniform� than on “equitable�. For example, a per-student fixed amount subsidy (“BOS�) is provided to all schools, both public and private, to finance the education of students in basic education (Grade 1-9). The 46 Preparing Indonesian Youth for Transition Is the System Prepared? Governance and Financing present form of the uniform unit cost does not address the need for narrowing the gap between better off and disadvantaged schools. There are yet to be any structured subsidies to senior secondary education. It is clear that the higher the level of education, the more the “uniformed� financing will benefit the better off, and thus more targeted spending is needed. The resource differentials between public and private schools remain large. One key public resource is teachers in civil service, paid by the Government. The uneven distribution of these teachers, beyond in public and private schools, but also across schools in better off and disadvantaged areas, and in urban and rural areas, reflects largely the inequitable distribution of public resources. The central government has put in place scholarship programs aiming at narrowing the gaps between individual students. However, the coverage of this program remains small, and the school-based implementation has left out by design many children or youth who are out of school system already. Low public spending on senior secondary education leads to the significant financial contribution from house- holds either through out-of-pocket spending for their children to go to senior secondary schools, or paying schools directly in the form of various fees. Figure 4.5 shows that parents pay more for their children to go to private schools, averaging around USD 400 per year. Registration fees, school committee fees, and textbooks are the most costly items. This exceeds what Government pays in total, and nearly 3 times of government funding that flows down to school level to directly support school operations. Figure 4.5. Household expenditure per sr. secondary school pupil per year 3500000 other 3000000 courses transportation/school bus stationary 2500000 text book school and sport uniform 2000000 teaching support material test/evaluation student intra school organization 1500000 fees/ OSIS practice school committee fees/POMG/BP3 1000000 school fees/SPP registration fees 500000 0 public private public private SMA SMK Source: OECD (2010). Household expenditure on senior secondary education constitutes heavy financial burdens. As expected, well- off households pay more out-of-pocket than poor households do. However, these payments only comprise a small share (less than 10 percent) of total household expenditure for well-off households. In contrast, the house- holds in the poorest income quintile can spend as much as 30 percent of their total expenditure on sending a child to senior secondary school (Figure 4.6). Issues and Policy Agenda for Senior Secondary Education 47 Figure 4.6. Household expenditure on senior secondary education as % of total household expenditure, by income quintile 4,000,000 35% other 3,500,000 30% courses transportation/school bus 3,000,000 stationary 25% text book 2,500,000 school and sport uniform 20% teaching support material test/evaluation 2,000,000 student intra school organization 15% fees/ OSIS 1,500,000 practice school committee fees/POMG/BP3 10% 1,000,000 school fees/SPP registration fees 5% % of per child in senior secondary 500,000 expenditure to household income 0 0% Source: OECD (2010). Looking ahead, strengthening public financing of senior secondary education need to aim at narrowing two disparities: the disparities between private and public schools, and between poor and well-off households. The majority of private schools have been absorbing the students who are not able to enter public schools, which represent nearly half of the total senior secondary enrollment. Compared with those attending public schools, the students at private schools need more learning support. In addition, the household “wealth divide� in terms of senior secondary education participation points to the need of targeted government funding to support their demand and ensure affordability. 48 Preparing Indonesian Youth for Transition V. Towards Better Preparing Indonesian Youth For Transition Investing in senior secondary education has become crucial in preparing the Indonesian youth for making transi- tions to advancing their knowledge and skills and participating in the job world. Indonesia is at the right mo- ment of expanding investment in senior secondary education. This is not only because of the demand pressure from more and more graduates finishing 9 years of basic education, it is also an imperative for global competive- ness and necessary skills upgrading of labor force. The labor market signals have also created the right incentives for Indonesian youth to invest in higher levels of education. A. Main findings The key challenges that the current senior secondary education is facing are multi-faceted. Neither the learning outcomes nor the practical skills possessed by the current graduates are adequate to help them make success- ful transitions. Access to senior secondary education is largely inequitable – rural and poorer households often have fewer or none accessible schools, and have little resources to support their children to pursue education at this level. Provincial level disparities are also large in access. Although SMK has gained ground in expanding enrollment in recent years, it still seems to be unattractive to top students, to have lower likelihood for its gradu- ates to pursue higher education or advanced professional training. In the meantime, for the significant share of SMA graduates who are not able to participate in tertiary education, the lack of necessary labor market skills as perceived by many employers is also of concern. Schools also face challenges in delivering the promises. The most important resource for schools is teachers. Even though there is no lack of teachers at Indonesian’s senior secondary schools, they don’t seem to be ad- equately incentivized to deliver results. Many of them hold multiple jobs for additional income. Teachers are particularly underpaid in private schools, where resources are scarce. The resource gaps between public and private schools are large, which is not only reflected by the gaps in teacher salaries, but also in key teaching and learning facilities such as laboratories. At system level, the key institutions necessary for a quality assurance system are in place. However, how to make the system work needs to clearly identify their mandates, and to put in place a strong accountability system. Nei- ther national standards nor minimum standards are currently enforced, assessed, and reported. Nationwide stu- dent assessments are carried out at the end of education cycles, mostly for the selection of students to the next cycle, but not for accountability purposes. There are no established mechanisms for reporting the outcomes of student performance or average school performance. Teacher evaluation is currently going through the “certifi- cation� process, but continued performance evaluation of teachers has not been in place. School accreditation is not regularly carried out, particularly for a majority of private schools. Overall public financing for senior secondary education is low, which is reflected by the low unit public spending per student compared with that of other countries. Funding at school level is particularly inadequate considering that a significant portion of public funding stays at central and local government level, without directly flowing to schools. Households still pay a significant share of the expenditures at school and student level (estimated at 75 percent), a fact that is closely associated with the huge disparities in senior secondary education participation between rich and poor households. The way that the public resources are currently used is not able to have significant effect on narrowing these gaps. The pro-poor scholarships are given to students at schools, not those who have dropped out, thus excluding the poorest or the neediest by design. B. Policy implications Looking ahead, diversified strategies are needed given the much varied conditions of the provinces. There are some provinces where access to junior secondary education is still a major issue, and priorities should be given to junior secondary education accordingly. In many other provinces, limited school places have represented a 50 Preparing Indonesian Youth for Transition Towards Better Preparing Indonesian Youth for Transition binding constraint to further broadening senior secondary school expansion. Building more schools will need to be mapped according to the population distribution, and considering using existing excess teachers. Equitable access will remain a key challenge. The wealth divide in the opportunities of pursuing higher educa- tional attainment remains large. The high cost born by households has made senior secondary education un- reachable by the poorest. The current school-based scholarships program has not been able to reach those who were left out in the first place. Targeted and household-based voucher system should be considered for better supporting the under-privileged. Rethinking the division of general and vocational educational track will also be needed while establishing a long- term vision for senior secondary education in Indonesia. The vocational secondary school provides a fast route for training mid-level skilled workers for the immediate needs of the labor market. Widening the openings for the SMK graduates to pursue skills upgrading will be increasingly needed in the future with more sophisticated demand for skills from the labor market. In the meantime, how to offer SMA graduates who do not enter tertiary education the opportunities of obtaining necessary labor market skills is also challenging. Responding to the future expansion of tertiary education as well as the labor market demand for higher level of skills, the two tracks are likely to become similar in the future, and converge at an integrated system of offering solid basic skills as well as in-school vocational training programs. In the interim, a variety of options can be considered to strengthen the two tracks of senior secondary educa- tion. SMK’s curriculum can be made more flexible. A spectrum of different intensities of vocational subjects can be considered. For example, some may just be vocational course work, while others may require significant immersions and internships at firms or production units. The vocational certificate in addition to senior second- ary school diploma can reflect these varieties. SMA students can also have access to SMK coursework through school partnerships, or even night courses offered by SMK with capacities, and obtain similar vocational training certificates. The “3+1� program, which has been put forward by MoEC in 2010 has offered another alternative for streamlining the senior secondary education. After 3 years of solid education, a fourth year can offer a variety of options for se- nior secondary graduates: to sharpen vocational skills through practices in the real job world, or to continue with advanced course work preparing for entering polytechnics. New education and training institutions can also be considered such as the “Training and Further Education� institutes in Australia (Box 5.1). Some high capacity SMK may have the potential to be given these additional responsibilities. Currently, the flexible pathways to achieve various educational goals have been in the design, but more chal- lenges will lie in the implementation, which needs commitment and concerted effort from many stakeholders for a solid quality assurance system, and operationalize the national qualification framework and a functional skills assessment system for both cognitive and vocational skills. Box 5.1. Training and further education in Australia In Australia, training and further education or TAFE institutions provide a wide range of predominantly vocational tertiary education courses, mostly qualifying courses under the National Training System/Australian Qualifications Framework/Austra- lian Quality Training Framework. Fields covered include business, finance, hospitality, tourism, construction, engineering, visual arts, information technology and community work. Individual TAFE institutions (usually with many campuses) are known as either colleges or institutes, depending on the state or territory. TAFE colleges are owned, operated and financed by the various state and territory governments. This is in contrast to the higher education sector, whose funding is predominantly the domain of the Commonwealth government and whose universities are predominantly owned by the state governments. Issues and Policy Agenda for Senior Secondary Education 51 Measuring learning outcome and skills proficiency is also essential for quality improvement. The national educa- tion assessment program needs to be put in place to regularly monitor education quality, and diagnose existing quality issues and devise remedial measures. Localized monitoring of learning outcomes should also be put in place to serve as diagnostic, motivational, and accountability tools at individual teachers and student level. This is also necessary for implementing outcome-focused curriculum. An effective quality assurance system needs to clearly define each stakeholder’s roles and responsibilities, and build strong accountability mechanisms. Table 5.1 provides a summary of the roles that need to be strengthened for a well-functioning system. Table 5.1. Strengthening quality assurance system Accreditation Standards Local Central Schools Agency (BAN) Agency (BSNP) government government Performance Teaching and learning Set up performance standards following perfor- standards (8 areas) mance standards Performance Carry out regular Develop assessment Carry out regular Set up national assessments student and teacher instrument school assessment policies promoting performance assess- performance assess- ments Set up local policies ment promoting assess- ment at schools level Performance Report assessment Provide assessment reporting results to local gov- information to central ernment government as policy input or feedback Program Carry out program impact impact evaluations evaluations regularly, on national programs, as well as some local programs Require- Developing accredita- Set up operational Set national guideline ments for tion instruments requirement for for operation require- schools to based on standards; schools; ment of schools operate implement accredita- Register schools tion based on operational requirement Adequate Provide more Allocation of re- National resources to and eq- resources including sources to narrow the narrow regional gaps uitable teaching resources gaps across schools resources to disadvantaged students Autonomy, Support, supervise Support local govern- intervention, schools ments and support Accountabil- Hold teachers ac- Hold schools Hold local govern- ity and con- countable for student accountable for ment accountable sequences performance; install teachers and students in using central re- reward and sanction performance; install sources in an effective system rewards and sanction and equitable way; system fund flow based on performance 52 Preparing Indonesian Youth for Transition Towards Better Preparing Indonesian Youth for Transition Expanding the access to secondary education will need more public resources at this level. It is never easy to determine what is an appropriate level of public financing of education in a given country. Currently, Indonesian families pay 3-4 times of the Government budget for the direct and indirect costs, including various fees, trans- portation, uniform, teaching and learning materials, and other incidentals. Comparisons with other countries can provide a useful guide for making judgment on levels of government funding. Giving that 20 percent of Government budget has already been allocated to the education sector, intra-sectoral allocations and spending efficiencies appear to be the first order issues that need to be addressed. This will aim at maximizing the output using existing capacity. Better quality and deployment of teachers, increase in teacher workload, reduction in their double-jobs, and improvement in teacher motivation, performance, and account- ability, will be the most direct measures. Better use public resources also need better targeting strategies, supporting the most disadvantaged areas and population groups. On the supply side, public resources should be used to narrow the geographic inequality due to the marked urban bias in school locations. The creation of new senior secondary schools in the coming years will present a prime opportunity to reduce the distance-to-school in rural areas. These new schools should care- fully target the rural kecamatan and kabupaten where presently lack senior secondary schools. One the demand side, establishing means-tested system to financially support children from the families of very low income will further narrow the demand gap. For a majority of private schools in Indonesia, being private primarily means being poor and under-resourced. It also means that without public intervention, the learning gap between public and private students will likely to increase, as private schools tend to enroll those who are not able to enter public school system with lower academic achievement at junior secondary school level. Targeted demand-side financing such as school voucher can also serve as an instrument that provides incentives and financial means to improve private schools as they make efforts to attract students and resources. Nonetheless, some public investment would be needed at the beginning, such as to upgrade school’s teaching and learning conditions, to improve teacher knowledge and skills, and to improve school management, before the new mechanism can work, and the quality can continue improving through competition for students and resources. International experience tells us that reforming senior secondary education will face many daunting challenges. While the reform recommendations offered here are mainly based on accumulated global experience, policy- makers need to be highly aware that the impact of reforms varies in different institutional and demographic settings. As Indonesia moves ahead towards the goal of universal 12-year education, piloting reforms in small scale before rolling out, and evaluating impacts and cost-effectiveness of these reforms are crucial to ensure their long-term success and sustainability. Issues and Policy Agenda for Senior Secondary Education 53 References 1. Agustina, Cut Dian, Dandan Chen, Andrew Ragatz, and Imam Setiawan (2009). Working Paper (54052), Schol- arship Programs in Indonesia: Past, Present, and Future. 2. Australia Indonesia Partnership (2002). Aspirations and Destinations: Senior Secondary Education Graduates in Eastern Indonesia. 3. Carnoy, Martin and Michel Welmond (1996). Do Teachers Get Paid Too Much? A Worldwide Comparison of Teacher Pay, mimeo, Stanford. 4. Chen, Dandan (2008). Policy Research Working Paper (4814). Vocational Schooling, College Entry, and Labor Market Outcomes. 5. ____ (2009). Policy Research Working Paper (4975). Economics of Teacher Supply in Indonesia. 6. Cox, Critian (2006). Working Paper (37014). Policy Formation and Implementation in Secondary Education Reform: The Case of Chile at the Turn of the Century. 7. De Ree, Joppe Jaitze (2012). Policy Brief. Teacher certification in Indonesia: a doubling of salary, or a way to improve learning? 8. Fuchs, T. and L. Woessmann (2007). What Accounts for International Differences in Student Performance? A Re-examination Using PISA data�. Empirical Economics, Vol. 32, No. 2-3, pp. 433-464. 9. Fuller, B. (1987). What Factors Raise Achievement in the Third World? Review of Educational Research, Vol. 57, No. 3, pp 255-292. 10. International Labor Organization (2011). Report of the Workshop on Employment Diagnostic Analysis in Maluku. 11. Ministry of Education, Indonesia (2004-2009a). General Senior Secondary Education Data. Education Data Center. 12. _________ (2004-2009b). Vocational Senior Secondary Education Data. Education Data Center. 13. Newhouse, David and Daniel Suryadarma (2009). Policy Research Working Paper (5053), The value of voca- tional education : high school type and labor market outcomes in Indonesia. 14. OECD (2010). PISA 2009 Results: What Makes a School Successful? Resources, Policies and Practices. 15. Park, Soon-Jung (2009). Skills Development Strategy: Pre-employment VET investment (Korean case). Memo. The World Bank. 16. Republic of Indonesia (2011). Masterplan: Acceleration and Expansion of Indonesia Economic Development 2011-2025. Coordinating Ministry for Economic Affairs. 54 Preparing Indonesian Youth for Transition References 17. Rivkin, S., E. Hanushek and J. Kain (2005), Teachers, Schools, and Academic Achievement�, Econometrica, Vol. 73, No. 2, pp. 417-458. 18. Straus, John et al (2009). The Fourth Wave of Indonesia Family Life Survey: Overview and Field Report. RAND Corporation. 19. UNESCO (2006). Decentralization of Education in Indonesia. In Country Report at the UNESCO Seminar Implementing Education for All: Teacher and Resource Management in the Context of Decentralization, 7, place de Fontenoy, 75352 Paris 07 SP (France). United Nations Educational, Scientific and Cultural Organiza- tion, Division of Educational Policies and Strategies. 20. ________ (2009). World Education Indicators. 21. The World Bank (1984). General Secondary Education in Indonesia: Issues and Programs for Action. 22. The World Bank (2005). Directions for Development (34360), Expanding Opportunities and Building Compe- tencies for Young People: A New Agenda for Secondary Education. 23. __________(2006). Meeting the Challenges of Secondary Education in Latin America and East Asia: Improv- ing Efficiency and Resource Mobilization (Emanuela di Gropello ed.) 24. _________ (2007). Chile: Institutional Design for an Effective Education Quality Assurance. Human Devel- opment, Latin America and the Caribbean Region, World Bank. 25. _________ (2008). At the Crossroad: Choices for Secondary Education in Sub-Saharan Africa. 26. _________ (2009a). Secondary Education in India: Universalizing Opportunity. 27. _________ (2009b). The Role and Impact of Public-Private Partnership in Education. 28. ¬¬¬¬¬_________ (2009c). Transforming Indonesia’s Teaching Force. 29. _________ (2010a). Demand for Skills in Indonesia. 30. _________ (2010b). Skills, Education and Labor Market Outcomes for Youth in Indonesia. 31. _________ (2010c). Job Report. 32. _________ (2011a). School-Based Management In Indonesia (forthcoming). 33. _________ (2011). Growth and Investment in Indonesia’s Manufacturing Sector (forthcoming). 34. __________ (2012). School-Based Management in Indonesia (forthcoming). 35. World Education Forum (2000). Education for All 2000 Assessment. Issues and Policy Agenda for Senior Secondary Education 55 APPENDIX: Summary Description of Reading, Math, And Science Proficiency in Pisa Level Reading Math Science 6 Tasks at this level typically require the Students can conceptualize, generalize Students can consistently identify, reader to make multiple inferences, and utilize information based on their explain and apply scientific knowledge comparisons and contrasts that are both investigations and modeling of complex and knowledge about science in a detailed and precise. They require dem- problem situations. They can link differ- variety of complex life situations. They onstration of a full and detailed under- ent information sources and represen- can link different information sources standing of one or more texts and may tations and flexibly translate between and explanations and use evidence from involve integrating information from them. Students at this level are capable those sources to justify decisions. They more than one text. Tasks may require of advanced mathematical thinking and clearly and consistently demonstrate ad- the reader to deal with unfamiliar ideas, reasoning. These students can apply vanced scientific thinking and reasoning, in the presence of prominent competing this insight and understanding along and they demonstrate willingness to use information, and to generate abstract with a mastery of symbolic and formal their scientific understanding in support categories for interpretations. Reflect and mathematical operations and relation- of solutions to unfamiliar scientific and evaluate tasks may require the reader to ships to develop new approaches and technological situations. Students at this hypothesize about or critically evaluate strategies for attacking novel situations. level can use scientific knowledge and a complex text on an unfamiliar topic, Students at this level can formulate and develop arguments in support of recom- taking into account multiple criteria or precisely communicate their actions mendations and decisions that centre on perspectives, and applying sophisticated and reflections regarding their findings, personal, social or global situations. understandings from beyond the text. A interpretations, arguments, and the salient condition for access and retrieve appropriateness of these to the original tasks at this level is precision of analysis situations. and fine attention to detail that is incon- spicuous in the texts 5 Tasks at this level that involve retriev- Students can develop and work with At Level 5, students can identify the sci- ing information require the reader to models for complex situations, identify- entific components of many complex life locate and organize several pieces of ing constraints and specifying assump- situations, apply both scientific concepts deeply embedded information, inferring tions. They can select, compare, and and knowledge about science to these which information in the text is relevant. evaluate appropriate problem-solving situations, and can compare, select and Reflective tasks require critical evaluation strategies for dealing with complex evaluate appropriate scientific evidence or hypothesis, drawing on specialized problems related to these models. Stu- for responding to life situations. Students knowledge. Both interpretative and dents at this level can work strategically at this level can use well-developed reflective tasks require a full and detailed using broad, well-developed thinking inquiry abilities, link knowledge ap- understanding of a text whose content and reasoning skills, appropriately linked propriately and bring critical insights to or form is unfamiliar. For all aspects representations, symbolic and formal situations. They can construct explana- of reading, tasks at this level typically characterizations, and insight pertain- tions based on evidence and arguments involve dealing with concepts that are ing to these situations. They can reflect based on their critical analysis. contrary to expectations. on their actions and formulate and communicate their interpretations and reasoning. 4 Tasks at this level that involve retrieving At Level 4 students can work effec- At Level 4, students can work effectively information require the reader to locate tively with explicit models for complex with situations and issues that may and organize several pieces of embed- concrete situations that may involve involve explicit phenomena requiring ded information. Some tasks at this level constraints or call for making assump- them to make inferences about the role require interpreting the meaning of nu- tions. They can select and integrate of science or technology. They can select ances of language in a section of text by different representations, including and integrate explanations from different taking into account the text as a whole. symbolic representations, linking them disciplines of science or technology Other interpretative tasks require un- directly to aspects of real-world situa- and link those explanations directly to derstanding and applying categories in tions. Students at this level can utilize aspects of life situations. Students at this an unfamiliar context. Reflective tasks at well-developed skills and reason flexibly, level can reflect on their actions and this level require readers to use formal or with some insight, in these contexts. they can communicate decisions using public knowledge to hypothesize about They can construct and communicate scientific knowledge and evidence. or critically evaluate a text. Readers must explanations and arguments based on demonstrate an accurate understanding their interpretations, arguments and of long or complex texts whose content actions. or form may be unfamiliar 56 Preparing Indonesian Youth for Transition References Level Reading Math Science 3 Tasks at this level require the reader to Students can execute clearly described Students can identify clearly described locate, and in some cases recognize the procedures, including those that require scientific issues in a range of contexts. relationship between, several pieces of sequential decisions. They can select and They can select facts and knowledge to information that must meet multiple apply simple problem-solving strategies. explain phenomena and apply simple conditions. Interpretative tasks at this Students at this level can interpret and models or inquiry strategies. Students at level require the reader to integrate use representations based on different this level can interpret and use scientific several parts of a text in order to identify information sources and reason directly concepts from different disciplines and a main idea, understand a relationship from them. They can develop short com- can apply them directly. They can or construe the meaning of a word or munications reporting their interpreta- develop short statements using facts phrase. They need to take into account tions, results and reasoning. and make decisions based on scientific many features in comparing, contrast- knowledge. ing or categorizing. Often the required information is not prominent or there is much competing information; or there are other obstacles in the text, such as ideas that are contrary to expectation or negatively worded. Reflective tasks at this level may require connections, com- parisons, and explanations, or they may require the reader to evaluate a feature of the text. Some reflective tasks require readers to demonstrate a fine under- standing of the text in relation to familiar, everyday knowledge. Other tasks do not require detailed text comprehension but require the reader to draw on less com- mon knowledge. 2 Some tasks at this level require the Students can interpret and recognize reader to locate one or more pieces situations in contexts that require no of information, which may need to be more than direct inference. inferred and may need to meet several They can extract relevant information conditions. Others require recognizing from a single source and make use of a the main idea in a text, understanding single representational mode. relationships, or construing meaning Students at this level can employ basic within a limited part of the text when algorithms, formulae, procedures, or the information is not prominent and conventions. They are capable of direct the reader must make low level infer- reasoning and literal interpretations of ences. Tasks at this level may involve the results. comparisons or contrasts based on a single feature in the text. Typical reflec- tive tasks at this level require readers to make a comparison or several connections between the text and outside knowledge, by drawing on personal experience and attitudes. 1b/1 Tasks at this level require the reader: to Students can answer questions involving Students have such a limited scientific locate one or more independent pieces familiar contexts where all relevant infor- knowledge that it can only be applied of mation is present and the questions are to a few, familiar situations. They can explicitly stated information; to recog- clearly defined. They are able to identify present scientific explanations that are nize the main theme or author’s purpose information and to carry out routine pro- obvious and follow explicitly from given in a text about a familiar topic; or to cedures according to direct instructions evidence. make a simple connection between in explicit situations. They can perform information in the text and common, ev- actions that are obvious and follow im- eryday knowledge. Typically the required mediately from the given stimuli. information in the text is prominent and there is little, if any, competing informa- tion. The reader is explicitly directed to consider relevant factors in the task and in the text. Issues and Policy Agenda for Senior Secondary Education 57 Level Reading Math Science 1a Tasks at this level require the reader to locate a single piece of explicitly stated information in a prominent position in a short, syntactically simple text with a familiar context and text type, such as a narrative or a simple list. The text typi- cally provides support to the reader, such as repetition of information, pictures or familiar symbols. There is minimal competing information. In tasks requir- ing interpretation the reader may need to make simple connections between adjacent pieces of information. 58 Preparing Indonesian Youth for Transition Printed on recycled paper