Does More Spending on Education Matter to Human Capital Formation? Study Case of Bengkulu Province, Indonesia

Nurfitriani Nurfitriani(1*), Romi Bhakti Hartarto(2)

(1) Department of Economics, Faculty of Economics and Business, Universitas Muhammadiyah Yogyakarta
(2) Department of Economics, Faculty of Economics and Business, Universitas Muhammadiyah Yogyakarta
(*) Corresponding Author


Based on Statistics Indonesia (BPS), Indonesia will face a demographic bonus era during 2020-
2035. That implies that the number of productive-age population will be higher than elderly people
and children (dependents). This phenomenon offers an opportunity due to a lower dependency
burden. However, the situation could be catastrophic if the government is not ready to equip the
productive age population with necessary skills. The objective of this study is to determine whether
or not higher spending on education has positive influence on human capital formation in Bengkulu
Province. The research used panel data analysis of ten regions in Bengkulu Province for the 2010-
2014 periods. Research results showed that spending on education does not have significant impact
on human capital development, while women empowerment and infrastructure have positive effect
on human capital. Our results imply that more spending on education does not matter if it is not
supported by quality infrastructure that makes education facilities accessible.


human capital; HDI; health; education; infrastructure

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