With the globalized economy,well-educated youth will be critical to Indonesia scompetitiveness in the future. Demand for skilled workerswill increase with skill-oriented technological change. Inaddition, a large pool of skills also facilitates knowledgespillover and attracts technology imports. In the pastdecades, significant changes of Indonesia s labor markethave already taken place. Non-agricultural jobs increasedsignificantly, and skilled labor in non-agricultural sectoris on higher demand. In the meantime, higher levelprofessional and managerial jobs have also increased. Incontrast, unskilled, agricultural, and administrativeworkers are on lower demand. Overall, the earningsdifferentials between people with different education levelsare significant. The marginal returns to higher levels ofeducation - senior secondary or tertiary level - areincreasing. How to educate the youth and turn them intoproductive labor force and future leaders is closely linkedto the country s future. This sector report assessesIndonesia s senior secondary school system from threeangles: (1) how well does the senior secondary educationprepare the Indonesian youth for transition? What are theoutcomes? Is there equitable access? (2) How are the seniorsecondary schools in Indonesia prepared for delivering theirpromises? Do they have adequate resources and inputs? (3)How is the system prepared? Are there effective qualityassurance mechanisms? Is the system financing arrangementadequate? The report ends with policy recommendations.
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