This thesis is a study analyzing rate of return to education in Indonesia using the 2004 SUSENAS (National Economic Survey) data. Education is one human resource investment that could increase the human resource quality as an input of development. The 2004 Human Development Report shows that the rate of participation in the lower level education is quite high, but it decreases as the level of education increases. As an investment, education is expected to give high rate of return. It raises questions conceming the rate of return on education in Indonesia. Wage is used as a proxy of return to education and the return is estimated using the Mincerian Earning Function. The information about wage is only available among respondents that are classified as employees and therefore the selectivity bias might occur. The study will be conducted using the two stage Heckman method.The estimation from the Mincerian Earning Function shows that women in the industrial and service sector are higher than men in the same sector. There are no differences in return between men and women for those working in the agricultural sector. The results also show that the rate of return for those with 1 year of schooling who are working in the agricultural sector are the lowest. But those with 7 years of schooling the agriculture sector has the highest rate of return. There are no differences in rate of return in education by gender.