human beings are active. It is humankind who is an active agent that will gather capital,
exploit natural resources, build various social, economic and political organizations,
and carry out the national development. If a country does not immediately develop the
expertise and knowledge of its people and does not effectively utilize their potential in
the development and management of the national economy, then in the future the
country will not be able to develop anything.
Schultz (1961) argues that in a society, its members can be invested through
spending on education, training, research and health to increase its production capacity.
Human capital contributes greatly to increase the income. Human capital is an engine
for economic growth (Azid and Khan, 2010). The quality of human capital depends on
its education. The higher the level of education, the quality or productivity of humans
is also expected to be higher. Educational and health outcomes as a form of
measurement of the quality of human capital cannot be achieved at the same level for
all communities. Higher education and a healthy life requires a lot of high costs, so that
not all people can get maximum education and health facilities. Educational
achievements in society are influenced by various variables that have been widely
studied and published in various journals.
Variables that influence education are widely expressed by various studies. Variable
income per capita, population growth rate, level of government expenditure in the
education sector, total population and total urbanization are the variables that have a
significant influence on the level of adult education in developing countries (Mazumdar
2005). On the other hand, Faguet and Sánchez (2008) provide more diverse variables
to see the effect on education. These variables are per capita expenditure for public
education costs, government spending on the education sector, growth in local
government spending, teacher to student ratio, politics, household demographics and
socioeconomic status.
Poverty has had a wide impact on human existence, not only the private lives of
those who are poor, but also for people who are not classified as poor. Poverty is not
only a personal burden, but also a burden and responsibility of the community, state
and the world to overcome it (Maipita, 2014). One method that is believed to be very
effective in reducing poverty is through education. Empirical evidence shows that
increasing access of the poor towards education, health, and reducing inequality of
access is important in poverty alleviation. Poverty can be caused by: (a) low quality
labor force due to low levels of education, (b) difficult and limited access to capital
ownership, (c) low levels of technological mastery, (d) inefficient use of resources, and
(e) high population growth (Sharp et al., 2000). The results of various studies find that
economic growth will increase income per capita and ultimately lead to a decrease in
poverty (Dollar and Kraay, 2001; Field, 1989).
3 Studied Models
The model is built based on the main literature referenced from Rajkumar and Swaroop
(2008) and several other supporting articles such as Anyanwu and Erhijakpor (2007);
Checchi (1999); Flug et al. (1998); Pritchett and Filmer (1999); and Psacharopoulos
(1994). The model development will refer to education indicators in the form of Pure
Participation Rates. The categories used for NER are elementary, junior high and senior