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Improving Human Capital through Better Education to Support Indonesia’s Economic Development

Author

Listed:
  • Latif Adam
  • Siwage Dharma Negara

    (Indonesian Institute of Sciences (LIPI))

Abstract

Despite Indonesia’s impressive economic growth, it still lags behind other countries with a similar income level in terms of the quality of its human capital. This paper argues that one key factor explaining this low quality of human capital relates to the lack of focus and clear strategies to develop its education system. This paper attempts to assess Indonesia’s current state of human capital development with particular focus on its education sector. In order to benefit from its demographic bonus, Indonesia needs to to improve its current education and skill-training system. Better education and skill-training system will support the country’s effort to reduce poverty and youth unemployment. The effectiveness of public spending in education should be improved to raise the quality of education. Indonesia needs to integrate its human capital development plan with its economic master plan.

Suggested Citation

  • Latif Adam & Siwage Dharma Negara, 2015. "Improving Human Capital through Better Education to Support Indonesia’s Economic Development," Economics and Finance in Indonesia, Faculty of Economics and Business, University of Indonesia, vol. 61, pages 92-106, August.
    • Handle: RePEc:lpe:efijnl:201508
    as

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    References listed on IDEAS

    as
    1. Chris Manning & Raden M. Purnagunawan, 2011. "Survey of recent developments," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 47(3), pages 303-332, December.
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    3. World Bank, 2010. "Indonesia Jobs Report," World Bank Publications - Reports 27901, The World Bank Group.
    4. Chen, Dandan, 2009. "Vocational Schooling, Labor Market Outcomes, and College Entry," Policy Research Working Paper Series 4814, The World Bank.
    5. Aurelien Kruse & Emanuela di Gropello & Prateek Tandon, 2011. "Skills for the Labor Market in Indonesia : Trends in Demand, Gaps, and Supply," World Bank Publications - Books, The World Bank Group, number 2282.
    6. Hawley, Joshua D., 2004. "Changing returns to education in times of prosperity and crisis, Thailand 1985-1998," Economics of Education Review, Elsevier, vol. 23(3), pages 273-286, June.
    7. Chris Manning & Kurnya Roesad, 2007. "The Manpower Law of 2003 and its implementing regulations: Genesis, key articles and potential impact," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 43(1), pages 59-86.
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    More about this item

    Keywords

    Human Capital; Poverty; Unemployment; Education; Development;
    All these keywords.

    JEL classification:

    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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