Labor Market Outcomes of Vocational High Schools (SMK) and General High Schools (SMA) during the COVID-19 Pandemic

Abstract

The fourth Sustainable Development Goals (SDGs) adopts a lifelong learning approach to education and introduces vocational and tertiary education into the global agenda. While Vocational Education and Training (VET) was almost absent in previous international development frameworks, the agenda 2030 and its SDGs highlight greater importance to it. Consequently, many governments in developing countries promote vocational secondary education to improve labor market outcomes. This study aimed to determine the development of return on investment for Vocational High Schools (SMK) and Senior High Schools (SMA) in 2020. The data used the August 2020 National Labor Force Survey (SAKERNAS) data with Two-Step Heckman and the Mincer Revenue Function. As a result, in 2020, the return on investment in vocational education was 16.82% higher than the rate of return on investment in high school education. However, observed by the age group, the results show that SMK only provides an initial wage advantage for men, which then declines with age. Although male SMK graduates experienced poorer results, female SMK graduates did not experience the same decline.

References

Arkes, J. (1999). What Do Educational Credentials Signal and Why Do Employers Value Credentials? Economics of Education Review, 18(1), 133–141. https://doi.org/10.1016/s0272-7757(98)00024-7
Arum, R., & Shavit, Y. (1995). Secondary Vocational Education and theTtransition from School to Work. Sociology of education, 68(3), 187–204. https://www.jstor.org/stable/2112684
Asian Development Bank. (2018). Indonesia Enhancing Productivity Through Quality Jobs. In Asian Development Bank.
Asian Development Bank. (2021). Covid-19 and Labor Markets in Southeast Asia Impacts on Indonesia, Malaysia, The Philippines, Thailand, and Vietnam. Asian Development Bank. https://doi.org/DOI: http://dx.doi.org/10.22617/TCS210508-2
Asian Productivity Organization. (2019). Productivity Databook 2019. https://www.apo-tokyo.org/publications/wp-content/uploads/sites/5/APO-Productivity-Databook-2019_light.pdf
Badan Pusat Statistik (BPS). (2020). Keadaan Pekerja di Indonesia Agustus 2020. https://www.bps.go.id/publication/2020/11/30/351ae49ac1ea9d5f2e42c0da/keadaan-pekerja-di-indonesia-agustus-2020.html
Becker, G. S. (1964). Human Capital: A Theoretical and Empirical Analysis, with Special Reference to Education. University of Chicago press. https://ssrn.com/abstract=1496221
Borjas, G. (2015). Labor economics (7thedition). McGraw-Hill Education.
Chen, D. (2009). Vocational Schooling , Labor Market Outcomes , and College Entry. Policy Research Working Paper, January.
Choi, S. (2020). Impact of Family Background and Individual Characteristics on Vocational High School Choice in South Korea: A Gender Analysis. Journal of Technical Education and Training, 12(4), 16–26. http://penerbit.uthm.edu.my/ojs/index.php/jtet
El-Hamidi, F. (2006). General or Vocational Schooling? Evidence on School Choice, Returns, and “Sheepskin” Effects from Egypt 1998. The Journal of Policy Reform, 9(2), 157–176. https://doi.org/10.1080/13841280600772861
Farahnasy, I. (2006). Faktor Penentu Upah di Indonesia. Faculty of Economics, University of Indonesia.
Hayes, A., & Setyonaluri, D. (2015). Taking Advantage of The Demographic Dividend in Indonesia: A Brief Introduction to Theory and Practice. UNFPA Indonesia, April, 3–5.
Heckman, J. J. (1977). Sample Selection Bias as A Specification Error. National Bureau of Economic Research, Inc. https://doi.org/https://doi.org/10.1515/9781400856992.206
Hendajany, N., Widodo, T., & Sulistyaningrum, E. (2016). Human Capital Versus The Signaling Hypotheses: The Case of Indonesia. Journal of Indonesian Economy & Business, 31(2). https://doi.org/https://doi.org/10.22146/jieb.15290
International Labour Organization. (2010). World of Work Report 2010 from One Crisis to The Next ? International Labour Office. https://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/documents/publication/wcms_145078.pdf
International Labour Organization. (2021). ILO Monitor : COVID-19 and the World of Work Updated estimates and analysis (Eighth, Nomor October). https://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/documents/briefingnote/wcms_824092.pdf
LPEM. (2020). Macroeconomic Analysis Series: Indonesia Economic Outlook Triwulan II-2020.
McConnell, C., Stanley, B., & Macpherson, D. (2016). Contemporary labor economics (11th edition). McGraw-Hill Education.
Moeis, F. R. (2022). Unraveling the Myth of Madrasah Formal Education Quality in Indonesia: a Labor Quality Approach. Educational Research for Policy and Practice, 21(2), 177–200.
Muhyiddin, M., & Nugroho, H. (2021). A Year of Covid-19: A Long Road to Recovery and Acceleration of Indonesia’s Development. Jurnal Perencanaan Pembangunan: The Indonesian Journal of Development Planning, 5(1), 1–19.
Newhouse, D., & Suryadarma, D. (2011). The Value of Vocational Education: High School Type and Labor Market Outcomes in Indonesia. World Bank Economic Review, 25(2), 296–322. https://doi.org/10.1093/wber/lhr010
OECD. (2019). OECD Reviews of Vocational Education and Training. OECD. https://doi.org/https://doi.org/10.1787/20777736
Pasay, N. H. A., & Quarina, Q. (2015). Rates of Returns to Vocational and General Upper Secondary Education, and to Experience in Addressing the Hollow Middle in lndonesia, 2007. Economics and Finance in Indonesia, 58(3), 239. https://doi.org/10.7454/efi.v58i3.50
Passay, N. H. A., & Quarina, Q. (2015). Rates of Returns to Vocational and General Upper Secondary Education, and to Experience in Addressing the Hollow Middle in lndonesia, 2007. Economics and Finance in Indonesia, 58(3), 239. https://doi.org/https://doi.org/10.7454/efi.v58i3.50
Patrinos, H. (2016). Estimating the return to schooling using the Mincer equation. IZA World of Labor, July, 1–11. https://doi.org/https://doi.org/10.15185/izawol.278
Psacharopoulos, G., & Woodhall, M. (1985). Education for development: An analysis of investment choices. World Bank Publication. https://doi.org/https://doi.org/10.2307/2069840
Purnastuti, L., Salim, R., & Joarder, M. A. M. (2015). The Returns to Education in Indonesia: Post Reform Estimates. The Journal of Developing Areas, 49(3), 183–204.
Rahayu, T. E. (2010). Pengaruh Perbedaan Penghasilan Terhadap Keputusan Pindah Kerja Tahun 2008-2009. Universitas Terbuka.
Sparrow, R., Dartanto, T., & Hartwig, R. (2020). Indonesia Under the New Normal: Challenges and the Way Ahead. Bulletin of Indonesian Economic Studies, 56(3), 269–299.
Taniguchi, K., & Tuwo, A. (2014). New Evidence on the Gender Wage Gap in Indonesia. SSRN Electronic Journal, 404. https://doi.org/10.2139/ssrn.2512096
Tilak, J. B. G. (2002). Education and Poverty. Journal of Human Development, 3(2), 191–207. https://doi.org/10.1080/14649880220147301
World Bank. (2011). Indonesia Jobs Report.
World Economic Forum. (2020). The future of jobs report 2020. The Future of Jobs Report, October, 1163. https://www.weforum.org/reports/the-future-of-jobs-report-2020/digest
Zimmermann, K. F., Biavaschi, C., Eichhorst, W., Giulietti, C., Kendzia, M. J., Muravyev, A., Pieters, J., Rodríguez-Planas, N., & Schmidl, R. (2013). Youth Unemployment and Vocational Training. Foundations and Trends® in Microeconomics, 9(1–2), 1–157. https://doi.org/ht- tp://dx.doi.org/10.1561/0700000058