Evaluating the Effects of Indonesia’s BLT Program: A Difference-in-Differences Analysis

Abstract

This dissertation examines the impact of the Indonesian Bantuan Langsung Tunai (BLT) program following the 2005 fuel price shock. The study aims to measure the effect of the program on four key outcomes: non-food consumption, with a particular focus on fuel- related expenditure such as electricity, fuel, and transportation; children’s school attendance; working hours; and overall quality of life. The study employs a quasi-experimental approach using the Difference-in-Difference (DiD) methodology. Data are drawn from the Indonesian Family Life Survey (IFLS), which comprises three waves from 1997, 2000, and 2007. The analysis was conducted on a sample of 2,544 Indonesian households. The finding shows a positive impact of the BLT program on non-food consumption. However, the program is associated with a negative effect on children’s school attendance, alongside an increase in working hours, while no significant effect is found on overall quality of life. The negative effect on school attendance was concentrated in urban areas and among households with lower education levels, whereas the increase in working hours was primarily observed among low-income households.