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A sectoral growth‐income inequality nexus in Indonesia

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  • Iván González Gordón
  • Budy P. Resosudarmo

Abstract

This paper provides evidence of strong associational effects between economic growth in the manufacturing, agriculture, mining and services sectors and income inequality, measured by an income equality variable, using panel data for Indonesian districts and cities over the period 2000 to 2010. The results show a significantly positive impact of both manufacturing and services shares of GDP on income inequality. The share of agriculture in GDP, however, shows a significantly negative impact on income inequality. The effects are robust to the incorporation of control variables, making a case for considering sectoral differences in policy targeting for achieving inclusive growth. Este artículo proporciona evidencia de los fuertes efectos asociativos entre el crecimiento económico en los sectores manufacturero, agrícola, minero y de servicios y la desigualdad de ingresos, medida por una variable de igualdad de ingresos, para lo cual usa datos de panel de distritos y ciudades de Indonesia durante el período 2000 a 2010. Los resultados muestran un impacto positivo significativo de la contribución del sector manufacturero y el de servicios en el PIB en la desigualdad de ingresos. Sin embargo, la contribución de la agricultura al PIB muestra un impacto negativo significativo en la desigualdad de ingresos. Los efectos se muestran robustos ante la incorporación de variables de control, lo que justifica que se consideren las diferencias sectoriales en la orientación de las políticas para lograr un crecimiento inclusivo. 本稿では、2000年~2010年のインドネシアのdistrictとcityのパネルデータを使用して、製造業、農業、鉱業、サービスセクターの経済成長と、所得平等変数で測定した所得不平等との強い因果関係を示すエビデンスを提示する。結果から、GDPの製造業とサービスが占める割合は、所得不平等に有意に正のインパクトを与えることが示されるが、GDPに占める農業の割合は所得不平等に対し、有意に負のインパクトを与えることも示された。この因果関係は、制御変数を代入した場合も頑健であることから、インクルーシブ・グロース (包摂的成長)を実現するための政策目標の設定がセクターによって異なることを考慮することが正しいことが示される。

Suggested Citation

  • Iván González Gordón & Budy P. Resosudarmo, 2019. "A sectoral growth‐income inequality nexus in Indonesia," Regional Science Policy & Practice, Wiley Blackwell, vol. 11(1), pages 123-139, March.
  • Handle: RePEc:bla:rgscpp:v:11:y:2019:i:1:p:123-139
    DOI: 10.1111/rsp3.12125
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    Cited by:

    1. Falentina, Anna T. & Resosudarmo, Budy P., 2019. "The impact of blackouts on the performance of micro and small enterprises: Evidence from Indonesia," World Development, Elsevier, vol. 124(C), pages 1-1.

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    More about this item

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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