Indonesia’s major educational reforms date back to the 1970s when universal primary education was set as a key policy goal. In 1984, the government declared sixyears of primary education as compulsory, following which in 1994 an additional three years of junior secondary education became part of compulsory education (Takahashi 2011). Various initiatives were undertaken to further these goals. For example, in 1972, a large-scale primary school construction program (Sekolah Dasar Inpres) was launched, which saw more than 61,000 schools built between 1973 and 1979 and a rise in enrolment rates of 7–12 year olds from 69 per cent in 1973, to 84 per cent for men, and 82 per cent for women in 1978 (Duflo 2001). Over the years, educational initiatives have moved from schemes targeting overall enrolment, to schemes focusing on educational access for the more under privileged segments of the population and educational quality. However, progress has been variable. Looking at patterns of educational disparity, Takahashi (2011) found that the rural–urban gap in junior secondary enrolment has narrowed from 23 percentage points in 1993 to 10 percentage points in 2007,while the gender gap has been eliminated, likely due to more job opportunities for women and changing cultural
attitudes.However,familial wealth and household head’s education level continued to have a significant impact on enrolment, indicating that inter-generational transmission of educational advantage is still prevalent despite various measures to defray schooling costs and encourage compulsory education. Peer effects, in the form of enrolment rates in the neighbourhood, are also significant in predicting enrolment, indicating that education policies may be more effective if they target social groups rather than individual households. While enrolment levels in Indonesian schoolar every high(with an etprimary enrolment rate above 90 per cent since before 2000 and an 80 per cent gross secondary enrolment rate in 2009) (World Bank 2012), educational achievement for children from poor families has not progressed much beyond the primary level. In 2010, only 44 per cent of the poorest quintile of children attained at least a 7th grade education versus 90 per cent for the richest quintile. While more children from all income groups were attending all levels of schooling, gaps in attainment rates between income groups widened, implying that much of the increase in schooling rates was from higher income groups(World Bank 2012;see Figure 7). One of the major programs recently introduced to help public school students from low income households was the Bantuan Siswa Miskin (BSM) program, introduced in 2008. BSM provides cash transfers to poor students, conditional on attendance and other criteria, to defray schooling costs such as school fees, transportation, and school uniforms. While the program reached three million students in 2008 and six million students in 2010 across all levels of schooling, it is estimated that only half of all the scholarship money went to the poorest 40 percent of households,likely due to the way in which scholarship eligibility is decided—by schools and teachers rather than a central authority. Scholarship amounts defrayed only 30 per cent of the costs and rose at a slower rate than education costs. Nevertheless, the program was successful in achieving a larger presence in rural areas: the rural area share of total BSM benefits was 25 per cent higher than for urban areas, while students from two poor