Introduction. School transition is important as a benchmark for education progress in many developing countries, including Indonesia. Moreover, the school transition has been identified as a crucial turning point in school progress in Indonesia. The purpose of the article is to analyze the role of income, gender against the school transition in Indonesia.
Materials and Methods. Methods in this research were conducted in two phases, fixed effect and conditional logit. The data used are from the Indonesian Family Life Survey and to capture the occurrence of several events in Indonesia with the risk associated with economic crisis in Indonesia against school transition.
Results. A sharp permanent income decrease shock will have a larger effect upon parental investment than one realized later in the child’s lifetime and the effect of permanent household income shocks is significant and decreases in older childhood, as predicted by the permanent income hypothesis. When household income is faced with shocks constraint conditions of loans and credit market imperfections, girls tend to be used as a coping strategy to support private consumption in doing consumption smoothing, especially transition from primary to junior secondary education.
Discussion and Conclusion. Permanent income have long-term consequences of the decision-making process in the school transition. Girls experienced an increase in continuing education, especially at higher levels. Furthermore, when household income is faced with shocks constraint conditions of loans and credit market imperfections, girls tend to be used as a coping strategy to support private consumption in doing consumption smoothing.
Keywords: complete secondary education, role of income, gender, fixed effect, conditional logit, school transition
The role of education and household composition for transitory and permanent income inequality–evidence from PSID data
