Educational System Reform in Indonesia

At the beginning of the new millennia, Indonesia implemented the 9th year of compulsory basic educational policy. Since then, there have been rapid changes with the launching of programs by the government to address the needs of free and affordable education. One is known by BOS funding program that was introduced in 2005. Basically, this program aims to boost the school participation rate of students who inhibited due to financial circumstances, but in 2009 this programs also transfer a certain amount of money to subsidize low-quality school in the rural area. Despite all positive review and report from several survey institution, many still question the effectiveness of the BOS fund, and the impact it brings to the student’s participation rate. This paper argues about the impact of BOS funding on school participation rate, and whether there is an underlying correlation between BOS fund and the poverty rate. The result of the fixed effect method revealed a positive correlation between BOS fund and school participation rate, in both primary and secondary schools, with the effect of primary school intervention showing a larger effect.