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Twenty Years of Expenditure Inequality in Indonesia, 1993–2013

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  • Arief Anshory Yusuf

    ()
    (Department of Economics, Padjadjaran University)

  • Andy Sumner

    ()
    (King's International Development Institute, King's College London)

  • Irlan Adiyatma Rum

    ()
    (Department of Economics, Padjadjaran University)

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.

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File URL: http://lp3e.fe.unpad.ac.id/wopeds/201314.pdf
File Function: First version, 2013
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Bibliographic Info

Paper provided by Department of Economics, Padjadjaran University in its series Working Papers in Economics and Development Studies (WoPEDS) with number 201314.

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Length: 21 pages
Date of creation: Aug 2013
Date of revision: Jul 2014
Handle: RePEc:unp:wpaper:201314

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Keywords: Inequality; Gini; Theil;

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  1. Arief Anshory Yusuf & Ahmad Komarulzaman & Muhamad Purnagunawan & Budy P. Resosudarmo, 2013. "Growth, Poverty and Labor Market Rigidity in Indonesia: A General Equilibrium Investigation," Working Papers in Economics and Development Studies (WoPEDS) 201304, Department of Economics, Padjadjaran University, revised Jan 2013.
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