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Twenty Years of Expenditure Inequality in Indonesia, 1993-2013

Listed author(s):
  • Arief Anshory Yusuf
  • Andy Sumner
  • Irlan Adiyatma Rum

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://hdl.handle.net/10.1080/00074918.2014.939937
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Article provided by Taylor & Francis Journals in its journal Bulletin of Indonesian Economic Studies.

Volume (Year): 50 (2014)
Issue (Month): 2 (August)
Pages: 243-254

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Handle: RePEc:taf:bindes:v:50:y:2014:i:2:p:243-254
DOI: 10.1080/00074918.2014.939937
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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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