
 
expenditure,  student–teacher  ratio,  politics, 
household demography, and socioeconomic status. 
Poverty  significantly  impacts  on  people’s  lives, 
not only for those living in poverty but also for people 
living in prosperity. Poverty is both individual and 
social  problem  which  means  every  nation  should 
work  together  defeating  poverty.  The  best  way  to 
escape poverty is through education (Maipita, 2014, 
2016). Empirical evidence shows that better access to 
education for lower socioeconomic status is pivotal in 
saving a nation from poverty. Poverty can be caused 
by: (a) low quality of human resource caused by low 
level of education, (b) difficult and limited access of 
capital ownership, (c) low technological competence, 
(d)  inefficient  use  of  resources,  and  (e)  high 
population  growth  (Sharp  et  al.,  2000).  Many 
research  results  imply  that  economic  growth  can 
improve per capita income that will finally lead to the 
decrease of poverty ratio (Dollar and Kraay, 2001; 
Field, 1989). 
3  RESEARCH METHOD 
This study followed a model built according to the 
main literature from Rajkumar and Swaroop (2008) 
and  some  complementary  articles  including  from 
Anyanwu (2007); Checchi (1999); Flug et al. (1998); 
Pritchett  and  Filmer  (1999);  and  Psacharopoulos 
(1994).  A  model  of  educational  data  results  is 
developed into two categories, enrollment ratio and 
years of schooling. Both were assumed to be the main 
indicators of education besides many other variables. 
The  categories  used  for  enrollment  ratio  were 
Elementary School (ES), Junior High School (JHS), 
and Senior High School (SHS), as the score results of 
education.  The  first  model  was  the  determinant  of 
enrollment  which  was  divided  into  three  levels  of 
education: ES, JHS, and SHS in net enrollment ratio 
(NER).  The  second  model  was  the  determinant  of 
mean  years  of  schooling  (MYS).  The  independent 
variables taken  from the  result of literature  studies 
were per capita income; government expenditure on 
education;  GINI  coefficient;  and  age  from  people 
aged 7-12 years old (Elementary School age), 3-15 
year old (Junior High School age), and 16-18 years 
old (Senior High School age). 
The data used in this study was from the Susenas 
2011-2015. The macro economic and fiscal data were 
collected from the Central Bureau of Statistics and the 
Ministry of Finance, Directorate General for Fiscal 
Affairs of the Republic of Indonesia. Unit analysis 
was  done  at  the  provincial  level  annually. 
Additionally,  the  econometric  model  was  formed 
from panel and time series data during 2011-2015, 
and cross section data for provinces in Indonesia. 
To  analyze  the  significant  relationship  between 
independent and dependent variables from regression 
econometric  model,  hypothesis  testing  on  the 
parameters  of  population  regression  function  was 
conducted.  This  hypothesis  testing  covered  single 
parameter  significance  test  and  overall  test  on  the 
population regression function. T-test was used for 
hypothesis  testing  in  parameters  of  a  single 
population  while  the  significance  of  overall 
regression  was  tested  using  f-test  (Wooldridge, 
2009).  To  identify  whether  there  was 
multicollinearity,  Variance  Inflation  Factor  (VIF) 
was utilized. Then the white test was employed for 
analyzing Heterocedasticity. 
4  RESULT AND DISCUSSIONS 
In  this  section,  the  estimation  results  for  each 
equation are discussed. The model  is  estimated by 
using the Fixed Effect for 29 provincial data and 5 
years of observation from 2011 to 2015. There are 5 
provinces  that  are  not  included  in  the  estimation 
because the data is not available. The five provinces 
are:  Riau  Islands  Province,  Jakarta  Special  Capital 
Region Province, Gorontalo Province, West Sulawesi 
Province and West Papua Province. The 29 provinces 
are considered to be sufficient to represent Indonesia. 
Hence, the analysis can still be done. 
The Fixed Effect model was chosen because it has 
the  ability  to  make  model  specifications  for  each 
variable  from  the  data  cross-section.  This  is  to 
provide an in-depth analysis of each province in the 
model.  This  makes  it  easy  to  determine  which 
provinces  have  a  greater  impact,  having  different 
roles based on coefficient signs. 
One  of  the  key  indicators  of  educational 
performance is school enrollment and mean years of 
schooling.  Table  1  is  the  result  of  estimation  for 
elementary  school,  junior  high  school  (NER_JHS) 
and  senior  high  school  (NER_SHS)  school 
enrollment and the estimation results for mean years 
of schooling (MYS) as the dependent variable and all 
in percent units. Independent variables consisting of 
Per  Capita  Income  (PCI)  in  natural  logarithms, 
government expenditure on education (GOV_Ed) in 
percent  units  against  the  GRDP  of  each  province. 
GINI  variables  remain  in  index  units  and  age 
variables.  The  elementary  school  age  (AGE712), 
junior high school age (AGE1315) and senior high 
school age (AGE1618) are all in percent units of the 
population. 
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