Who benefits from higher education?

Amich Alhumami, Jakarta | Opinion | Sat, June 01 2013, 12:34 PM

Paper Edition | Page: 7

Education is a public good, that is indisputable. But whether higher education is also a public good, has long been a subject of scholarly debate among experts.

Such a debate is instigated by two related views. First, the economic benefits of higher education mostly go to private individuals rather than to society in general. Economic benefits include all kinds of advantages whether monetary or non-monetary, which can be equalized to material wealth.

Private individuals should therefore share a larger portion of the cost of higher education, as they benefit much more from it economically. Second, the logic of this view asserts that public funds should not be allocated in large proportion to higher education, as it produces mainly private economic benefits.

And those benefiting from higher education are mostly from high-income groups. Indeed, they enjoy very much the benefits of investment in higher education.

Two prominent economists, George Psacharopoulos and Harry Patrinos (2004), have analyzed returns on investment in education by income in both developed and developing countries. In developing countries with about US$3,000-$9,000 of income per capita, returns on investment from higher education for the public and private sectors are 11.3 percent and 19.3 percent respectively.

Similarly, in developed countries with an income of $9,500 above the share of public and private returns on investment in higher education is 10.8 percent and 19.0 percent respectively.

But the gap between the two is much wider in low-income countries with less than $1,000 of average earnings, accounting for 11.2 percent and 26 percent respectively (see Handbook of the Economics of Education, E.E. Publishing Ltd., 2004).

Nonetheless, is the argument saying that high-income groups reap the predominant economic benefits of higher education valid? Perhaps we should take into account the counterargument showing that middle class families and individuals who complete their tertiary education are tax payers. As they get jobs, they take part in economic activities which are supportive of national productivity.

A number of studies confirm that university-educated workers especially those with advanced knowledge and skills relevant to industry are much more productive. As a result, the incomes of college graduates increase faster than the incomes of those without tertiary education. In this context, they make a significant contribution to generating public revenue and creating shared economic resources for the common good.

Here, public funds collected from tax are then allocated for financing basic social services such as education. Yet, some people may argue that there is still a big problem related to the affordability of higher education.

In the context of Indonesia’s education attainment, it is stunning to note the issue of equity of access to higher education. It might be surprising to realize how wide is the disparity of education participation at tertiary level in terms of socio-economic groups. The total population aged 19-23 years old amounts to about 19.9 million people, and the number who are enrolled at both public and private universities, including religious and vocational higher education institutions, is about 5.8 million people.

The Education and Culture Ministry statistics (2011) show that the gross enrollment rate of tertiary education has reached 27.1 percent. However, we observe the fact that there is a great deal of disparity in higher education participation with reference to the National Socio-Economic Survey (BPS 2011).

It is reported that the proportion of quintile one (the poorest 20 percent of the population) studying at universities is only 4.4 percent; meanwhile, the proportion of quintile five (the richest 20 percent of the population) entering higher education institutions has already reached 43.6 percent.

This data clearly shows that the disparity in higher education attainment is evident illustrating that tertiary education is mostly enjoyed by the rich. Indeed, the inequity of higher education has become a critical problem which could instigate socio-political divisions within Indonesian society.

If this situation continues, social segregation based on economic status within society will worsen. Here, we should take into consideration the Marxian caveat: political uproar demanding radical change in social structures often results from the so-called class struggle, as people fight for economic resources and access to power. And the crux of the problem has always been social inequality including unequal access to higher education.

To promote equity in higher education, it must be affordable for all young people regardless of their socio-economic backgrounds. To do so the government has introduced the so-called Bidik-Misi scholarship program for students from low-income families. The Bidik-Misi scholarship program is considered a breakthrough since it paves the way for poor students to enter university.

This program has four main objectives: (1) improving access to higher education in order to lessen the gap in educational attainment between the poor and the rich; (2) widening the coverage of higher education in the young and productive population in order to enhance the competitiveness of Indonesia’s economy; (3) enlarging educated middle class groups in order to establish strong socio-economic structures; (4) expanding the critical mass within society in order to strengthen the social and cultural basis for the improvement of political democracy and for the betterment of the nation.

The beneficiaries of the Bidik-Misi scholarship program are increasing from year to year. Indeed, it is designed to respond to public aspirations that demand equal access to higher education. In this respect, it is reasonable if the government applies an affirmative action policy to overcome financial constraints for disadvantaged groups to get enrolled in university.

Certainly, affirmative action seems to be the only socio-political instrument to prevent high-income groups from dominating the economic benefits of higher education.

The writer, an anthropologist by training with a PhD obtained from the University of Sussex, UK, works at the Directorate of Education, the National Development Planning Agency (BAPPENAS). The views expressed are personal.