VOCATIONAL POLICY, SCHOOL ENROLLMENT DECISION AND PREMIUM WAGE: EMPIRICAL EVIDENCE FROM SENIOR SECONDARY SCHOOL IN INDONESIA

This Research aims to examine the determinant of individual’s choice above junior secondary secondary school as well as the earning differential between vocational and non vocational senior secondary school in Indonesia. We use large scale longitudinal observation of Indonesia Family Life Survey (IFLS) 2014 conducted by RAND Corporation. Following two step method of Bourguignon et el. (2007) for sample selection bias correction, we find that OLS estimation is fit with our research since insignificant in selectivity bias coefficient. Furthermore, Blinder-Oaxaca decomposition of earning differential is performed. This paper finds that government policy on vocational expansion has a positively significant impact on the parent decision to send their children to vocational education. In addition, there are little evidence that the premium-wage between vocational and general school are different.