The efficiency of education and microcredit programs on young adults' independence

This paper intends to evaluate the efficiency of programs aimed at providing youth education and microfinance services, as well as the direct and indirect impacts of such programs on the independence of the beneficiaries. The sample consists of 141 young adults in Indonesia; all of whom were beneficiaries of an NGO which focuses on youth development through education and microfinance initiatives. The free disposal hull (FDH) order-m technique employed in this study examines which initiative (education to youths or microfinance services for mothers) leads to the highest benefit (output) for the beneficiaries, given a certain level of cost (input). In operationalising the FDH, a composite index of independence that combines work status, work knowledge, self-determination, income, expenditure, and savings to measure the independence of the young adults was used as the output, and costs associated with implementing the programs serve as the input. The results indicate that in terms of output only, young adults whose mothers receive microfinance and no financial literacy training had the highest level of independence. On the other hand, when the costs associated with providing the programs are considered, the use of FDH order-m suggests no significant difference in the efficiency of the different programs.