IMPACT OF THE 1957 CHINESE SCHOOL CLOSURE POLICY IN INDONESIA ON STUDENT EDUCATIONAL AND ECONOMIC OUTCOMES

Abstract

Between 1957 and 1974, the Indonesian government implemented three policies that resulted in the closure of Chinese-medium schools in the country. I analyse the effects of one episode, the 1957 policy, on the educational and labor market outcomes of the affected students. This is done by difference-in-differences strategy, combining the differences across districts in the intensity of/exposure to the policy with differences across cohorts induced by the timing of the regulation. The results suggest that the Chinese school closure in 1957 positively affects the educational and labor market outcomes of non-Chinese male students. The policy also induces migration of non-Chinese female students to regions with more Chinese people and increases their labor force participation and wages. For Chinese students, the policy seems to increase the labor force participation rate of men in the long-term, but no effect is found for women.