Abstract
This study aims to analyze the impact of school operational assistance fund program (BOS program) on the dropout rate during the post-rising fuel prices using Indonesian Family Life Survey (IFLS) and difference in difference approach. The results showed that the impact of BOS on the dropout rate of students aged 7-15 years during the period investigated in this study was lower than those who did not receive BOS fund, but it was not statistically significant. In the meantime, if the account of the research is to be limited to the influenc e of students aged 16-20 years who had previously received the benefit of BOS, it shows that BOS program had a positive influence to the dropout rates. However, children aged 16-20 years who had not previously received benefits BOS negatively affect the dropout rates. Based on this fact, the benefit of the BOS following the fuel price hike in Indonesia during the research period did not seem to be particularly effective in lowering the dropout rate.
Highlights
The increase in world oil prices in 2005 reached its highest level for the past 25 years, which was about $ 70 per barrel, had forced the government to reduce subsidies for fuel oil (BBM) twice both in March and October (Bank Indonesia, 2005)
BOS program was commenced in July 2005 and was addressed to the elementary schools and junior secondary schools to reduce the burden of the people, the poor, in financing education following a rise in fuel prices
Measuring changes δ BOS program beneficiaries between the ages of 7-15 years who were on treatment relative to individuals who were in the control group
Summary
The increase in world oil prices in 2005 reached its highest level for the past 25 years, which was about $ 70 per barrel, had forced the government to reduce subsidies for fuel oil (BBM) twice both in March and October (Bank Indonesia, 2005). As a logical consequence of the reduction of fuel subsidies, the domestic fuel prices had a rise. In an effort to reduce the adverse effects of fuel price rising, the government had reallocated its budget to 4 (four) programs which were designed to reduce the burden of the people, notably the poor. Those four programs were programs in education, health, rural infrastructure, and cash transfers. BOS program was commenced in July 2005 and was addressed to the elementary schools and junior secondary schools to reduce the burden of the people, the poor, in financing education following a rise in fuel prices
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