EDUCATION OUTCOME IN EASTERN INDONESIA THROUGH EDUCATION EXPENDITURE

Abstract

There is a very urgent need to invest in education in the human capital of a nation, so the role of government is needed to ensure the capacity and possibility to access education. Therefore, adequate funding should encourage education outcome, as evidenced by the enrollment rate, expected length of schooling and average length of schooling. This study aims to determine the effect of education and health spending, fiscal decentralization, GRDP per capita (control variable) on education outcome. This study uses secondary data with panel data from 16 provinces in eastern Indonesia. The data analysis technique used is the structural equation model (SEM) with Rstudio software. The results of this study indicate that; (1) At the level of primary education and the expected duration of schooling, education expenditure has a positive and significant effect on school performance, while the level of education of the middle, high school and the duration expected schooling have no effect. (2) Health expenditure has a positive and significant effect on education outcome; (3) Fiscal decentralization has a positive and significant impact on school participation rates at primary level, for primary and middle school levels and the average length of schooling is not significant, but different from secondary level it has a negative impact and significant effect, while the expected length of schooling is not significant (4). The GRDP per capita has a positive and significant effect on education outcome, except that the school participation rate at the elementary level is not significant.