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Twenty Years of Expenditure Inequality in Indonesia, 1993-2013

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  • Arief Anshory Yusuf
  • Andy Sumner
  • Irlan Adiyatma Rum

Abstract

In this article, we consider the recent increase in inequality in Indonesia. We make new, consistent estimates of expenditure inequality for 1993-2013, using several measures that draw on household expenditure data from the National Socioeconomic Survey (Susenas) for 1993-2013. In doing so, we note that the central statistics agency, Badan Pusat Statistik (BPS), used grouped data for its estimates of inequality until 2009 and that this underestimated inequality up to then. Thus the rise in inequality reported since 2009 actually has a longer history. We argue that Indonesia experienced divergence and convergence at the same time: the magnitude of the rise in inequality was significant (divergence), but the rise was greatest in provinces or districts with low initial levels of inequality (convergence). We consider the literature on drivers of changes in inequality and identify a set of hypotheses, with an empirical basis, which we introduce as potential Indonesian-specific drivers of rising inequality for future exploration.

Suggested Citation

  • Arief Anshory Yusuf & Andy Sumner & Irlan Adiyatma Rum, 2014. "Twenty Years of Expenditure Inequality in Indonesia, 1993-2013," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 50(2), pages 243-254, August.
    • Handle: RePEc:taf:bindes:v:50:y:2014:i:2:p:243-254
    DOI: 10.1080/00074918.2014.939937
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    10. Andy Sumner & Peter Edward, 2014. "Assessing Poverty Trends in Indonesia by International Poverty Lines," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 50(2), pages 207-225, August.
    11. Cut Dian R.D. Agustina & Wolfgang Fengler & Günther G. Schulze, 2012. "The regional effects of Indonesia's oil and gas policy: options for reform," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 48(3), pages 369-397, December.
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    Cited by:

    1. Shrestha, Rashesh & Coxhead, Ian, 2018. "Export boom, employment bust? The paradox of Indonesia's displaced workers, 2000-14," CEI Working Paper Series 2018-6, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    2. Hal Hill, 2020. "Indonesian Living Standards over 50 Years: A Multidimensional Analysis," Asian Economic Journal, East Asian Economic Association, vol. 34(3), pages 249-274, September.
    3. Diego Martínez-Navarro & Ignacio Amate-Fortes & Almudena Guarnido-Rueda, 2020. "Inequality and development: is the Kuznets curve in effect today?," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 37(3), pages 703-735, October.
    4. Muhammad Solehuddin & Vina Adriany, 2017. "Kindergarten Teachers’ Understanding on Social Justice: Stories From Indonesia," SAGE Open, , vol. 7(4), pages 21582440177, October.
    5. Takahiro Akita & Sachiko Miyata, 2018. "Spatial Inequalities in Indonesia, 1996–2010: A Hierarchical Decomposition Analysis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 138(3), pages 829-852, August.
    6. Arief Anshory Yusuf & Andy Sumner, 2017. "Multidimensional poverty in Indonesia: How inclusive has economic growth been?," Departmental Working Papers 2017-09, The Australian National University, Arndt-Corden Department of Economics.
    7. Andi Syah Putra & Guangji Tong & Didit Okta Pribadi, 2020. "Food Security Challenges in Rapidly Urbanizing Developing Countries: Insight from Indonesia," Sustainability, MDPI, vol. 12(22), pages 1-20, November.
    8. Takahiro Akita, 2017. "Educational Expansion and the Role of Education in Expenditure Inequality in Indonesia Since the 1997 Financial Crisis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 130(3), pages 1165-1186, February.
    9. Asep Suryahadi & Ridho Al Izzati & Daniel Suryadarma & Teguh Dartanto, 2023. "How Inequality Affects Trust in Institutions: Evidence from Indonesia," Asian Economic Policy Review, Japan Center for Economic Research, vol. 18(1), pages 73-91, January.
    10. Aekapol Chongvilaivan & Jungsuk Kim, 2016. "Individual Income Inequality and Its Drivers in Indonesia: A Theil Decomposition Reassessment," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 126(1), pages 79-98, March.
    11. Sujarwoto, Sujarwoto & Tampubolon, Gindo, 2016. "Spatial inequality and the Internet divide in Indonesia 2010–2012," Telecommunications Policy, Elsevier, vol. 40(7), pages 602-616.
    12. Hal Hill, 2018. "Asia's Third Giant: A Survey of the Indonesian Economy," The Economic Record, The Economic Society of Australia, vol. 94(307), pages 469-499, December.
    13. Arief A. Yusuf & Reza Anglingkusumo & Andy Sumner & Putri R. Halim & Anggita C.M. Kusuma, 2020. "Routinization And The Changing Task Composition In The Labor Market: Evidence From Indonesia," Working Papers WP/06/2020, Bank Indonesia.
    14. Yessi Vadila & Budy P. Resosudarmo, 2020. "Tariff reform and income inequality in Indonesia," Regional Science Policy & Practice, Wiley Blackwell, vol. 12(3), pages 455-475, June.

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    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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