Abstract

The rationale of this study is to examine the impact of cash transfer on school attendance in Indonesia and whether the proportion of school children receiving cash transfer and those not receiving cash transfer is having the same effect. Using the data of Indonesia’s Family Life Survey-5 (IFLS-5) in 2014 covering 19 provinces with total observations of 16.024 household obtained from Rand Corporation and field interview held in 2015, the multiple cross section regression model was applied by using 2SLS and Probit regression method to examine the effect of cash transfer as exogenous variable, and individual vector, parents, and household as control variables on school attendance of children as endogenous variable. The main finding is that the cash transfer has significant positive effect in increasing children’s school attendance and the expenditure for children education. Nevertheless, the children from household receiving cash remittance tend to have lower school attendance vis-à-vis children from household not receiving the cash transfer. As policy considerations, it is advised to anticipate the migration effects when evaluating the effect of cash transfer on children’s school attendance or when updating migration policies and to improve the availability of facilities and basic infrastructure for school age children.

Key words:  Cash transfer, school attendance, household expenditure, education, children.