Figure 9 Percent of Primary Schools with Oversupply, Undersupply by Region <!-- Start of picture text --> 80%<br>60%<br>40%<br>68<br>55 52<br>20%<br>17<br>0%<br>-21<br>-20% -34 -37<br>-66<br>-40%<br>-60%<br>-80%<br>Total Urban Rural Remote<br>Percentage of Schools with Oversupply of Teachers Percentage of Schools with Undersupply of Teachers<br>Source : Employment and Deployment Survey 2005.<br>Note: Based on Current Entitlement Formula<br><!-- End of picture text --> The current method of determining teacher supply requirements encourages oversupply. Under the current system, schools submit their teacher supply requirements to the district office. The districts then request the number of additional teachers required from the central education office. The central office subsequently allocates teachers to districts and provides the additional teacher salaries through DAU. Under this system, the schools and districts – which do not actually pay the salaries – have a strong incentive to claim undersupply and request additional (and largely free) resources, with little incentive to use teacher resources efficiently. This is shown in practice, where schools almost always claim an undersupply, even when they have a large oversupply. In a 2005 survey of 276 primary schools, 65 percent of the schools claimed to have an undersupply while only 8 percent claimed an oversupply. However, according to the entitlement formula, 55 percent show oversupply while 34 percent show an undersupply (Table 11). Of the schools that claimed an undersupply, 41 percent actually had an oversupply .

Table 11 Primary School Claimed vs. Estimated Oversupply and Undersupply

||**Ov**<br>|**Claim**<br>**ersupply**<br>|**ed**<br>**Und**<br>|**ersupply**<br>|**Over**<br>|**Actual En**<br>**supply**<br>|**titlement**<br>**Unde**<br>|**rsupply**<br>|
|---|---|---|---|---|---|---|---|---|
||Percentage<br>ofSchools|Average No. of<br>Teachers Over|Percent. of<br>Schools|Average No of<br>Teachers Under|Percent. of<br>Schools|Average No of<br>Teachers Over|Percent of<br>Schools|Average No. of<br>Teachers Under|
|Urban|8|2.8|58|(2.1)|68|3.8|21|(2.2)|
|Rural|10|1.9|65|(3.1)|52|2.8|37|(2.7)|
|Remote|0|0.0|90|(4.5)|17|0.0|66|(4.3)|
|**All***|**8**|**2.0**|**65**|**(2.8)**|**55**|**2.9**|**34 **|**(2.9)**|

_Source:_ Employment and Deployment Survey 2005. _Note:_ * Weighted average. The percentage of schools does not add up to 100 because the schools that show the correct allocation are not included in the table: Employment and Deployment Survey, 2005 Figures are based on Current Entitlement Formula When considering the oversupply of teachers, it is important to take into account Indonesia’s large share of part-time teachers. About 6 percent of Indonesia’s primary school teachers and 25 percent of public secondary school teachers work part-time,<sup>25</sup> which has also added claims of an undersupply of teachers in certain areas. Taking this into account nevertheless only reduces the cost burden of the current personnel system only slightly, because part-time teachers’ salaries, on average, are not significantly lower than salaries of their full-time colleagues. As indicated in Figure 10, primary school teacher salary (including district and school incentives) varies surprisingly little based on hours worked. This is true for secondary school teachers as well. The fact that part-time teachers do not earn significantly less than regular teachers means that they are actually more expensive on a per-hour basis. At the secondary school level, subject experts are often hired on a part-time basis. In order to increase cost-effectiveness however, these teachers should be encouraged to improve their certifications to ensure full-time employability. At the primary level there are fewer part-time teachers (6 percent nationally), although primary teachers

> 25 When private school is taking into account, the percentage of secondary school teachers is 39 percent.

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