Abstract
Education is an indicator of advanced development, as education produces high quality human resources. However, the existence of gender gap in society causes low participation of women in education compared to men. This phenomenon happens due to various factors such as government policy, socio-economic, and culture. As such, this study aims to estimate the rate of return of gender-based school in Indonesia using Mincer earnings function. This study uses database Indonesia Family Life Survey (IFLS) 4 and 5. The two-step Heckman model of ordinary least square (OLS) is used for data analysis. The findings of this study are as follows. First, return to schooling is higher for male than female, for both service and manufacturing industries. Second, years of schooling, years of schooling interaction with manufacturing industril, years of schooling interaction with in service industril, the squared years of schooling interaction with manufacturing industril, the squared years of schooling interaction with service industril, gender interaction with service industril, gender interaction with manufacturing industril and urban/rural location are significantly influence return to schooling. While, squared years of schooling is not significantly influence return to schooling.
Highlights
Education is a longterm investment, in term of educational investments that considered as a commodity in economical perspective
This research is aimed to find determinant of return rate of educational investment and how much the return rate of individual education investments based on gender in Indonesia
Models used to estimate the return rate is adopting model used by Deolalikar (1993) as follows: ln =∝ + ∑ ( ) +
Summary
Education is a longterm investment, in term of educational investments that considered as a commodity in economical perspective. This brought an understanding that knowledge and skill mastering, skills and expertise owned by certain persons can be measured from economical value that can be returned in certain period of time through various occupancies based on the competencies (Faridah, 2015). Education fully affects the economical growth of a nation. This is not because the education will affect productivity, but will affect the fertility of the society (Mappalotteng, 2010). That with higher education level the individu can achieve higher income
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