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Top Incomes in Indonesia, 1920-2004

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  • Andrew Leigh
  • Pierre van der Eng

Abstract

Using taxation and household survey data, this paper estimates top income shares for Indonesia during 1920-2004. Our results suggest that top income shares grew during the 1920s and 1930s, but fell in the post-war era. In more recent decades, we observe a sharp rise in top income shares during the late-1990s, coincident with the economic downturn, and some evidence that top income shares fell in the early-2000s. For pre-war Indonesia, we decompose top income shares by income source, and find that for groups below the top 0.5 percent, a majority of income was derived from wages. Throughout the twentieth century, top income shares in Indonesia have been higher than in India, broadly comparable to Japan, and somewhat lower than levels prevailing in the United States.

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Bibliographic Info

Paper provided by Centre for Economic Policy Research, Research School of Economics, Australian National University in its series CEPR Discussion Papers with number 549.

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Date of creation: Mar 2007
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Handle: RePEc:auu:dpaper:549

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Keywords: inequality; top incomes; personal income taxation; Indonesia;

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References

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  1. Michael D. Bordo & Alan M. Taylor & Jeffrey G. Williamson, 2003. "Globalization in Historical Perspective," NBER Books, National Bureau of Economic Research, Inc, number bord03-1, October.
  2. Peter Timmer, 2004. "The Road to Pro-Poor Growth: The Indonesian Experience in Regional Perspective," Working Papers, Center for Global Development 38, Center for Global Development.
  3. Facundo Alvaredo, 2007. "The Rich in Argentina over the twentieth century: From the Conservative Republic to the Peronist experience and beyond 1932-2004," PSE Working Papers halshs-00588318, HAL.
  4. Michael D. Bordo & Alan M. Taylor & Jeffrey G. Williamson, 2003. "Introduction to "Globalization in Historical Perspective"," NBER Chapters, in: Globalization in Historical Perspective, pages 1-10 National Bureau of Economic Research, Inc.
  5. DAVIES, JAMES B & Shorrocks, Anthony & Sandstrom, Susanna & WOLFF, EDWARD N, 2007. "The World Distribution of Household Wealth," Center for Global, International and Regional Studies, Working Paper Series, Center for Global, International and Regional Studies, UC Santa Cruz qt3jv048hx, Center for Global, International and Regional Studies, UC Santa Cruz.
  6. Ragayah Haji Mat Zin, 2005. "Income Distribution in East Asian Developing Countries: recent trends," Asian-Pacific Economic Literature, Asia Pacific School of Economics and Government, The Australian National University, Asia Pacific School of Economics and Government, The Australian National University, vol. 19, pages 36-54, November.
  7. Thomas Piketty & Emmanuel Saez, 2003. "Income Inequality In The United States, 1913-1998," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 118(1), pages 1-39, February.
  8. Anthony B. Atkinson & Wiemer Salverda, 2005. "Top Incomes In The Netherlands And The United Kingdom Over The 20th Century," Journal of the European Economic Association, MIT Press, MIT Press, vol. 3(4), pages 883-913, 06.
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Cited by:
  1. repec:hal:wpaper:halshs-00588318 is not listed on IDEAS
  2. Jörg Baten & Mojgan Stegl & Pierre Eng, 2013. "The biological standard of living and body height in colonial and post-colonial Indonesia, 1770–2000," Journal of Bioeconomics, Springer, Springer, vol. 15(2), pages 103-122, July.
  3. repec:hal:wpaper:halshs-00586795 is not listed on IDEAS
  4. Salvatore Morelli & Timothy Smeeding & Jeffrey Thompson, 2014. "Post-1970 Trends in Within-Country Inequality and Poverty: Rich and Middle Income Countries," CSEF Working Papers, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy 356, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  5. Sambit Bhattacharyya & Budy R. Resosudarmo, 2013. "Growth, Growth Accelerations and the Poor: Lessons from Indonesia," Departmental Working Papers, The Australian National University, Arndt-Corden Department of Economics 2013-15, The Australian National University, Arndt-Corden Department of Economics.
  6. Alvaredo, Facundo, 2009. "Top incomes and earnings in Portugal 1936-2005," Explorations in Economic History, Elsevier, Elsevier, vol. 46(4), pages 404-417, October.
  7. Andy Sumner, 2013. "The Evolution Of Education And Health Poverty During Economic Development:The Case Of Indonesia, 1991–2007," Working Papers in Economics and Development Studies (WoPEDS), Department of Economics, Padjadjaran University 201311, Department of Economics, Padjadjaran University, revised May 2013.
  8. Anthony B. Atkinson & Thomas Piketty & Emmanuel Saez, 2009. "Top Incomes in the Long Run of History," NBER Working Papers 15408, National Bureau of Economic Research, Inc.
  9. Andy Sumner & Peter Edward, 2013. "From Low Income, High Poverty to High-Income, No Poverty? An Optimistic View of the Long-Run Evolution of Poverty in Indonesia By International Poverty Lines, 1984–2030," Working Papers in Economics and Development Studies (WoPEDS), Department of Economics, Padjadjaran University 201310, Department of Economics, Padjadjaran University, revised Jun 2013.
  10. Foldvari, Peter & van Leeuwen, Bas & Marks, Daan & Gall, Jozsef, 2013. "Indonesian regional welfare development, 1900–1990: New anthropometric evidence," Economics & Human Biology, Elsevier, Elsevier, vol. 11(1), pages 78-89.
  11. Lakner, Christoph & Milanovic, Branko, 2013. "Global income distribution : from the fall of the Berlin Wall to the great recession," Policy Research Working Paper Series 6719, The World Bank.
  12. Michał Brzeziński, 2013. "Asymptotic and bootstrap inference for top income shares," Working Papers 2013-01, Faculty of Economic Sciences, University of Warsaw.
  13. Michał Brzeziński, 2013. "Variance estimation for richness measures," Working Papers 2013-03, Faculty of Economic Sciences, University of Warsaw.
  14. Andrew Leigh, 2007. "How Closely Do Top Income Shares Track Other Measures of Inequality?," CEPR Discussion Papers, Centre for Economic Policy Research, Research School of Economics, Australian National University 562, Centre for Economic Policy Research, Research School of Economics, Australian National University.
  15. Fiorio, Carlo V & Saget, Catherine, 2010. "Reducing or aggravating inequality? : Preliminary findings from the 2008 financial crisis," ILO Working Papers, International Labour Organization 456487, International Labour Organization.

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