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Top Incomes in Indonesia, 1920-2004

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  • Andrew Leigh
  • Pierre van der Eng

Abstract

Using taxation and household survey data, this paper estimates top income shares for Indonesia during 1920-2004. Our results suggest that top income shares grew during the 1920s and 1930s, but fell in the post-war era. In more recent decades, we observe a sharp rise in top income shares during the late-1990s, coincident with the economic downturn, and some evidence that top income shares fell in the early-2000s. For pre-war Indonesia, we decompose top income shares by income source, and find that for groups below the top 0.5 percent, a majority of income was derived from wages. Throughout the twentieth century, top income shares in Indonesia have been higher than in India, broadly comparable to Japan, and somewhat lower than levels prevailing in the United States.

Suggested Citation

  • Andrew Leigh & Pierre van der Eng, 2007. "Top Incomes in Indonesia, 1920-2004," CEPR Discussion Papers 549, Centre for Economic Policy Research, Research School of Economics, Australian National University.
  • Handle: RePEc:auu:dpaper:549
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    File URL: https://www.cbe.anu.edu.au/researchpapers/cepr/DP549.pdf
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    References listed on IDEAS

    as
    1. Ragayah Haji Mat Zin, 2005. "Income Distribution in East Asian Developing Countries: recent trends," Asian-Pacific Economic Literature, Asia Pacific School of Economics and Government, The Australian National University, vol. 19, pages 36-54, November.
    2. DAVIES, JAMES B & Shorrocks, Anthony & Sandstrom, Susanna & WOLFF, EDWARD N, 2007. "The World Distribution of Household Wealth," Center for Global, International and Regional Studies, Working Paper Series qt3jv048hx, Center for Global, International and Regional Studies, UC Santa Cruz.
    3. C. Peter Timmer, 2004. "The road to pro-poor growth: the Indonesian experience in regional perspective," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 40(2), pages 177-207.
    4. Michael D. Bordo & Alan M. Taylor & Jeffrey G. Williamson, 2003. "Introduction to "Globalization in Historical Perspective"," NBER Chapters,in: Globalization in Historical Perspective, pages 1-10 National Bureau of Economic Research, Inc.
    5. Anthony B. Atkinson & Wiemer Salverda, 2005. "Top Incomes In The Netherlands And The United Kingdom Over The 20th Century," Journal of the European Economic Association, MIT Press, vol. 3(4), pages 883-913, June.
    6. Facundo Alvaredo, 2007. "The Rich in Argentina over the twentieth century: From the Conservative Republic to the Peronist experience and beyond 1932-2004," PSE Working Papers halshs-00588318, HAL.
    7. Michael D. Bordo & Alan M. Taylor & Jeffrey G. Williamson, 2003. "Globalization in Historical Perspective," NBER Books, National Bureau of Economic Research, Inc, number bord03-1, December.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    inequality; top incomes; personal income taxation; Indonesia;

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • N35 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Asia including Middle East
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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