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Abstract

This paper investigates whether the ‘Kuznets hypothesis’, that economic growth from low levels of GDP per capita is initially associated with an increase in income inequality and later followed by a decline in inequality, is supported by evidence for a less-developed country, Indonesia. The paper outlines the relevant features of the process of rapid growth and structural change, in particular industrialisation since the 1960s. It notes the possible consequences of this process for changes in income distribution, and draws on disparate sets of statistical data to trace trends in income inequality in Indonesia. The paper concludes that the evidence for Indonesia suggests an increase in inequality during the 1970s and a subsequent decrease of inequality until 1997. A comparison of the evidence with historical data for the UK and Japan suggests that income inequality in Indonesia was relatively low.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 12725.

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Date of creation: 14 Jan 2009
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Handle: RePEc:pra:mprapa:12725

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Related research

Keywords: income inequality; Kuznets hypothesis; Indonesia; economic development;

Find related papers by JEL classification:

• D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
• N35 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Asia including Middle East
• O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
• R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

This paper has been announced in the following NEP Reports:

• NEP-ALL-2009-01-17 (All new papers)
• NEP-DEV-2009-01-17 (Development)
• NEP-GEO-2009-01-17 (Economic Geography)
• NEP-HIS-2009-01-17 (Business, Economic & Financial History)
• NEP-SEA-2009-01-17 (South East Asia)

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1. Chris Manning & Kurnya Roesad, 2006. "Survey of recent developments," Bulletin of Indonesian Economic Studies, Taylor and Francis Journals, vol. 42(2), pages 143-170.
   
   • Armida Alisjahbana & Chris Manning, 2002. "Survey of Recent Developments," Bulletin of Indonesian Economic Studies, Taylor and Francis Journals, vol. 38(3), pages 277-305.
2. Lindert, Peter H., 2000. "Three centuries of inequality in Britain and America," Handbook of Income Distribution, in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 3, pages 167-216 Elsevier.
   
   • Peter H. Lindert, . "Three Centuries Of Inequality In Britain And America," Department of Economics 97-09, California Davis - Department of Economics.
3. Fields, Gary S., 1994. "Data for measuring poverty and inequality changes in the developing countries," Journal of Development Economics, Elsevier, vol. 44(1), pages 87-102, June.

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