IDEAS home Printed from https://ideas.repec.org/p/iuj/wpaper/ems_2001_06.html
   My bibliography  Save this paper

The Economic Crisis and Regional Income Inequality in Indonesia

Author

Abstract

This paper estimates regional income inequality in Indonesia during 1993-1998 using a Theil index based upon district- level GDP and population data. The overall regional income inequality increased significantly over the 1993-1997 period (from 0.262 to 0.287), during which Indonesia achieved an annual average growth rate of more than 7%. According to the two-stage nested inequality decomposition analysis, the increase is due mostly to the increase in the within-province inequality component, especially in the provinces of Riau, Jakarta, West Java, and East Java. In 1997, the within-province inequality component accounted for about a half of overall regional income inequality. In terms of per capita GDP, the economic crisis caused the Indonesian economy to revert to the 1995 level. The impact was, however, very uneven across provinces and districts. The overall regional income inequality declined to 0.266 in 1998, which corresponded to the level prevailing in 1993-94. Contrary to the 1993-1997 period, about three-quarters of the decline was due to the decrease in the between-province inequality component, in which the Java-Bali region played a prominent role through a significant decrease in its between-province inequality. The economic crisis appears to have been a crisis afflicting urban Java and urban Sumatra.

Suggested Citation

  • Takahiro Akita & Armida S. Alisjahbana, 2001. "The Economic Crisis and Regional Income Inequality in Indonesia," Working Papers EMS_2001_06, Research Institute, International University of Japan.
    • Handle: RePEc:iuj:wpaper:ems_2001_06
    as

    Download full text from publisher

    File URL: https://www.iuj.ac.jp/workingpapers/index.cfm?File=EMS_2001_06.pdf
    File Function: First version, 2001
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Takahiro AKITA & Rizal Affandi LUKMAN & Yukino YAMADA, 1999. "Inequality In The Distribution Of Household Expenditures In Indonesia: A Theil Decomposition Analysis," The Developing Economies, Institute of Developing Economies, vol. 37(2), pages 197-221, June.
    2. Mookherjee, Dilip & Shorrocks, Anthony F, 1982. "A Decomposition Analysis of the Trend in UK Income Inequality," Economic Journal, Royal Economic Society, vol. 92(368), pages 886-902, December.
    3. Jorge Garcia Garcia & Lana Soelistianingsih, 1998. "Why Do Differences in Provincial Incomes Persist in Indonesia?," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 34(1), pages 95-120.
    4. Bourguignon, Francois, 1979. "Decomposable Income Inequality Measures," Econometrica, Econometric Society, vol. 47(4), pages 901-920, July.
    5. Shorrocks, A F, 1980. "The Class of Additively Decomposable Inequality Measures," Econometrica, Econometric Society, vol. 48(3), pages 613-625, April.
    6. Takahiro Akita, 2000. "Decomposing Regional Income Inequality Using Two-Stage Nested Theil Decomposition Method," Working Papers EMS_2000_02, Research Institute, International University of Japan.
    7. J.S. Uppal & Budiono Sri Handoko, 1986. "Regional Income Disparities in Indonesia," Economics and Finance in Indonesia, Faculty of Economics and Business, University of Indonesia, vol. 34, pages 287-304.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hal Hill, 2002. "Spatial Disparities in Developing East Asia: a survey," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 16(1), pages 10-35, May.
    2. Takahiro Akita, 2001. "Regional Income Inequality in China: A Two-Stage Nested Inequality Decomposition Analysis," Working Papers EMS_2001_05, Research Institute, International University of Japan.
    3. Mohammad KHUSAINI & Setyo TRI WAHYUDI & Zamrud SISWA UTAMA, 2018. "Does Trade Openness And Fiscal Policy Affect Inequality And Economic Growth? A Study In Indonesia," Regional Science Inquiry, Hellenic Association of Regional Scientists, vol. 0(2), pages 215-226, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Takahiro Akita, 2002. "Regional Income Inequality In Indonesia And The Initial Impact Of The Economic Crisis," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 38(2), pages 201-222.
    2. Takahiro Akita, 2000. "Decomposing Regional Income Inequality Using Two-Stage Nested Theil Decomposition Method," Working Papers EMS_2000_02, Research Institute, International University of Japan.
    3. Takahiro Akita, 2001. "Regional Income Inequality in China: A Two-Stage Nested Inequality Decomposition Analysis," Working Papers EMS_2001_05, Research Institute, International University of Japan.
    4. Takahiro Akita, 2002. "Income Inequality in Indonesia," Working Papers EMS_2002_02, Research Institute, International University of Japan.
    5. Takahiro Akita & Rizal Affandi Lukman, 1999. "Spatial Patterns of Expenditure Inequalities in Indonesia: 1987, 1990 and 1993," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 35(2), pages 67-90.
    6. Takahiro Akita & Sachiko Miyata, 2018. "Spatial Inequalities in Indonesia, 1996–2010: A Hierarchical Decomposition Analysis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 138(3), pages 829-852, August.
    7. Takahiro Akita, 2024. "The Roles of Location and Education in Income Inequality: An Analytical Framework," Working Papers EMS_2024_06, Research Institute, International University of Japan.
    8. Takahiro Akita & Sachiko Miyata, 2008. "Urbanization, educational expansion, and expenditure inequality in Indonesia in 1996, 1999, and 2002," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 13(2), pages 147-167.
    9. Guido Erreygers & Roselinde Kessels & Linkun Chen & Philip Clarke, 2016. "Decomposing Socioeconomic Inequality of Health," EcoMod2016 9574, EcoMod.
    10. Takahiro AKITA & Rizal Affandi LUKMAN & Yukino YAMADA, 1999. "Inequality In The Distribution Of Household Expenditures In Indonesia: A Theil Decomposition Analysis," The Developing Economies, Institute of Developing Economies, vol. 37(2), pages 197-221, June.
    11. Takahiro Akita & Alit Pirmansah, 2011. "Urban Inequality in Indonesia," Working Papers EMS_2011_04, Research Institute, International University of Japan.
    12. François Bourguignon & Christian Morrisson, 2002. "Inequality Among World Citizens: 1820-1992," American Economic Review, American Economic Association, vol. 92(4), pages 727-744, September.
    13. Foster, James E. & Shneyerov, Artyom A., 2000. "Path Independent Inequality Measures," Journal of Economic Theory, Elsevier, vol. 91(2), pages 199-222, April.
    14. Weigert, Benjamin & Klemm, Marcus, 2015. "Composition matters! Wage inequality and the demographic and educational structure of the labor force in Germany," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112914, Verein für Socialpolitik / German Economic Association.
    15. Akita, Takahiro & Kawamura, Kazumi, 2002. "Regional income inequality in China and Indonesia: A comparative analysis," ERSA conference papers ersa02p432, European Regional Science Association.
    16. Jeong, Hyeok, 2008. "Assessment Of Relationship Between Growth And Inequality: Micro Evidence From Thailand," Macroeconomic Dynamics, Cambridge University Press, vol. 12(S2), pages 155-197, September.
    17. Takahiro Akita & Sachiko Miyata, 2020. "Urban and Rural Dimensions of the Role of Education in Inequality: A Comparative Analysis between Indonesia, Myanmar, and the Philippines," Working Papers EMS_2020_04, Research Institute, International University of Japan.
    18. James E. Foster & Joel Greer & Erik Thorbecke, 2010. "The Foster-Greer-Thorbecke (FGT) Poverty Measures: Twenty-Five Years Later," Working Papers 2010-14, The George Washington University, Institute for International Economic Policy.
    19. Stéphane Mussard & Michel Terraza, 2009. "Décompositions des mesures d'inégalité : le cas des coefficients de Gini et d'entropie," Recherches économiques de Louvain, De Boeck Université, vol. 75(2), pages 151-181.
    20. Takahiro Akita & Puji Agus Kurniawan & Sachiko Miyata, 2011. "Structural Changes and Regional Income Inequality in Indonesia: A Bidimensional Decomposition Analysis," Asian Economic Journal, East Asian Economic Association, vol. 25(1), pages 55-77, March.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iuj:wpaper:ems_2001_06. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kazumi Imai, Office of Academic Affairs (email available below). General contact details of provider: https://edirc.repec.org/data/gsiujjp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.