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Intragenerational Economic Mobility in Indonesia: A Transition from Poverty to the Middle Class in 1993–2014

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  • Teguh Dartanto
  • Faizal Rahmanto Moeis
  • Shigeru Otsubo

Abstract

Economic mobility, especially through expansion of the middle class, will dominate the future of Indonesia’s development agenda. Based on data from five waves of the Indonesia Family Life Survey (IFLS), we found that (1) poverty decreased significantly between 1993 and 2014, from 86.1% to 20.2%, while the middle class grew by almost nine times; (2) 34.4% of the poor moved into the middle class, but 11.9% were still categorised as chronically poor; (3) 42.3% of the middle class did not move into the upper class; (4) the middle and upper classes are vulnerable and easily fall into the lower classes. Our econometric estimations confirm that the drivers of economic mobility are educational attainment, formal employment, water and electricity supply, land ownership, and health investment. These findings suggest that investment in human and physical capital are the two main strategies to expand the middle class.

Suggested Citation

  • Teguh Dartanto & Faizal Rahmanto Moeis & Shigeru Otsubo, 2020. "Intragenerational Economic Mobility in Indonesia: A Transition from Poverty to the Middle Class in 1993–2014," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 56(2), pages 193-224, May.
    • Handle: RePEc:taf:bindes:v:56:y:2020:i:2:p:193-224
    DOI: 10.1080/00074918.2019.1657795
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    Cited by:

    1. Moeis, Faizal Rahmanto & Dartanto, Teguh & Moeis, Jossy Prananta & Ikhsan, Mohamad, 2020. "A longitudinal study of agriculture households in Indonesia: The effect of land and labor mobility on welfare and poverty dynamics," World Development Perspectives, Elsevier, vol. 20(C).
    2. Purwono, Rudi & Wardana, Wahyu Wisnu & Haryanto, Tri & Khoerul Mubin, M., 2021. "Poverty dynamics in Indonesia: empirical evidence from three main approaches," World Development Perspectives, Elsevier, vol. 23(C).

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