The sectoral structure of poverty during an adjustment period: Evidence for Indonesia in the mid-1980s
The authors examine the structure of poverty in Indonesia by sector of employment, and how it changed during the adjustment period, 1984 to 1987. They find that, while aggregate poverty decreased during the period, the gains to the poor were quite uneven across regions and sectors. Gains to the rural sector in key regions were quantitatively important to Indonesia's success in alleviating poverty, they found. Most poverty exists -- and most gains in alleviating poverty were made -- in the rural farming sector. These gains were associated with crop diversification and continued growth in off-farm employment. The government's adjustment program favored rural areas and were crucial to Indonesia's evident success at maintaining momentum in alleviating poverty. However, one should not underrate the favorable conditions in Indonesia when adjustment started.
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