Impact Evaluation of Indonesia Conditional Cash Transfer Program (BSM) on Student Achievement

Abstract

One of the Indonesia's Government efforts to improve the quality of education, particularly at the primary and secondary level, is the provision of BSM. This program launched under TNP2K due to the lack of significant BOS program in overcoming the number of drop out students due to parenting difficulties in meeting other educational needs such as uniforms, shoes, transportation costs and other education expenses not covered by BOS funds. However, the implementation of BSM has drawn a lot of criticism, especially regarding budget management and in terms of targeting, thus potentially hampering the achievement of BSM policy objectives. At the same time, there are inclusive errors and depending on the level of education, 50 to 70 percent of beneficiaries are ineligible. Whereas the budget for BSM program is proportional and in 2017 reaches Rp. 416.1 trillion or 27.4 percent of total APBN expenditure. Using the data from the 5th Indonesian Family Life Survey (IFLS) wave 5th, this study analyses the impact of BSM delivery on student achievement as measured by the final school exam scores. The method of analysis used is Propensity Score Matching, so the average treatment effect of BSM policy can be obtained. Despite the low targeting performance, the analysis shows that the program has a positive effect. Analysis shows Students who receive BSM program assistance get a higher test score of 5.6 percent than students who do not receive the program. Based on the analysis, the paper concludes that the program should be maintained and targeting efficiency needs to be improved as the program has a meaningful effect for low-income households in terms of increasing student achievement.