Analysis Of Education Inequality And Its Impact On Economic Growth In Riau Province.
Tambunan, Siswiny Marito Octalya Br.
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Besides physical capital and labor, human capital is one of important factors in stimulating economic growth. Schultz (1962) is one of the pioneers who emphasizes the importance of human capital. Previous research tends to put human capital as an indirect factor in economic growth and it is incorporated with the advancement of technology. Mankiw et al. (1992) place human capital in the Solow model as a separate factor from physical capital and labor. Thomas et al. (2001) state that education indicators are less effective in describing educational inequality. Therefore, it needs other tools to measure education inequality. One emerging tools is education gini as a proxy of human capital inequality. Previous research linking human capital inequality and economic growth is still limited in the region levels. This study aims to fill the gap by analyzing the impact of human capital inequality in Riau Province. GDP per capita of Riau Province was the the sixth ranked in Indonesia in 2011 with the value about Rp 9 123 million. However this achievement was not followed by educational attainment. This is indicated by mean of school years in Riau Province below mean of school years Maluku Province (8.7 years). In fact he value of GDP per capita in Maluku Province was the second lowest compared to other provinces in Indonesia. Therefore, this study aims to: (1) calculate educational inequality in Riau Province; (2) analyze the impact of education inequality on economic growth in Riau Province. The area of this study covers 11 districts in Riau Province during 2005-2011. This study uses the raw data of National Socioeconomic Survey (Susenas) conducted by the Central Bureau of Statistics (BPS), secondary data such as GDP by industry sector and other supporting data is also utilized. Method to answer the first objectives is gini index of education adopted from Thomas, et al (2001). The second objective is analyzed by using a static panel data regression analysis which the exogenous variable are gini education, mean of school years, population, ratio of road length and the share of industries to GDP. Results of gini education show that education inequality in Riau Province is relatively low over the period 2005-2011 as indicated by gini index below 0.3. Based on static panel data analysis with Fixed Effect Model (FEM). The study finds that education gini, ratio of road length and share of industrial sector to GDP are significant negatively affect on economic growth. This study suggests: (1) government policy is not only concern in educational attainment but also in education inequality, (2) further research can use other inequality measurement such as Theil index and atkinson index.
- MT - Economic and Management