In most developing countries, education is largely publicly provided. However, the scarcity of public funds and recent evidence of public school inefficiency, calls for an examination of the dominant role of the state. In this paper, we use data from Indonesia to examine the effectiveness of public versus private schools. We use labor market earnings as our measure of effectiveness. Controlling for observable personal characteristics and school selection, we find that graduates of private secondary schools perform better in the labor market. This is contrary to the widely held belief, in Indonesia, that public secondary schools are superior. Our findings, coupled with the existing literature on private school cognitive and cost advantages, suggest the need for greater private participation in the education sector.