Education is a strong predictor of economic performance. Educational inequality in opportunity
could thus make a significant contribution to earning disparities. Following Ferrerira and Gignoux
(2014) parametric method, we construct aggregate indices of inequality in educational opportunities
for thirteen Indonesian provinces in the years 1997, 2000 and 2007. The contribution of this paper is
to define individual indices of the power of circumstances, which measure the effect that the accumulation
of factors, outside individual control, has on individual educational achievements and earnings
in the short and long run. We find that-for the period considered- there has been a declining trend
in inequality of educational opportunities, albeit not in all provinces. Our findings also suggest that
parental educational background is the most significant factor for school survival. Additionally, the
effect that circumstances exert on future individual educational achievements and early earnings perspectives
tends to persist over time, but only to a very small extent. Our causal model, which relates
educational budget policy to equality of opportunity, shows that the educational budget has a negative
impact on the youngest cohorts, thus causing us to question the effectiveness of the allocation of
resources to primary and intermediate schools.