Indonesia has made notable progressin raising attainment levels in primary and secondaryschool. More than 1 million additional students graduatedhigh school in 2012 when compared with 1999, and graduationrates are expected to increase further. Major efforts arebeing made throughout the system to improve learningoutcomes and ensure graduates have more knowledge and betterskills. This progress at primary and secondary schoolcreates more demand for tertiary education (TE). Moststudents (88 percent in a recent survey) profess a desire tocontinue studying after high school. Indonesia's TEsystem, however, is not well prepared to help createrelevant, high-quality opportunities for this growing poolof high school graduates. Wages for those with TE are highand have remained so even as more and more workers enter thelabor market with at least some TE. TE is a good investmentin Indonesia, even when one attends a TE institution (TEI)of perceived low quality. Empirical analyses of labormarkets do not support the anecdotes about large numbers ofunemployed and underpaid workers with TE. This fact is amain general conclusion that should shape the direction ofTE policy in Indonesia.
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