Investment in human capital and public service delivery remain major policy concerns in Indonesia. Both public and private spending on health is relatively low, while the large increase in public spending on education in the past decade has yet to yield commensurate impact. In addition, human capital investments in Indonesia face substantial challenges with regards to governance, inequality in access to public services, and quality of education and health care. As a result, health and education outcomes fall behind those of its Southeast Asian neighbours. These issues are likely to have long welfare consequences and frustrate Indonesia’s ambition to achieve sustainable growth and significantly reduce poverty.

Research at the Indonesia Project on this theme focuses on the constraints and risks that Indonesian households face in enhancing and harnessing their human capital, and improving our understanding of how public policies may benefit health and education outcomes, as well as improve welfare and reduce inequality.