Year of Publication



Martin School of Public Policy and Administration

Date Available


Degree Name

Master of Public Administration

Committee Member

Dr. Keith Schnakenberg

Committee Member

Dr. Nicolai Petrovsky

Executive Summary

The Bantuan Operasional Sekolah (BOS) Program was launched in 2005 as a grant directly from the government to each school’s bank account based on the number of the students. The main goal of BOS is to cover school tuition in the public schools, lighten operational expenses in the private schools, and to provide free education for poor students, both in public and private schools. Since the BOS Program has been implemented nationally and the funding is granted based on the number of students, this study hypothesizes that the BOS Program will have an impact on the household expenditure in education. I will evaluate the impact of the BOS Program on the household expenditures in education, since one of the goals of its program is to reduce or eliminate the burden of school tuition for the parents in Indonesia.

This study estimates the impact of the BOS Program on household expenditures for education by using a panel data study with household fixed effects. The data to support this study has been gathered from The Indonesia Family Life Survey (IFLS) wave 2000 and wave 2007/08. This study posits that the determinant factors of household expenditures in education are total household expenditures, family size, parent education, type of school, level of school, and geographic location.

The trend of household education spending in Indonesia increased from 2000 to 2007. The total expenditures rose sharply from average IDR476,420.40 (~US$40) per year in 2000 to IDR2,454,508.00 (~US$205) per year in 2007 (with constant IDR 2007 values). The increasing trend for itemized spending, however, varies. The Indonesian household annual education expenditure was increasing after the implementation of the BOS program by IDR2,232,831.8 (~USD180). In addition, the regression result for the impact of the BOS program on itemizes household expenditures in education shows that all items are increasing, while the magnitude varies. Only the tuition fees and special courses are not statistically significant.



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