IDEAS home Printed from https://ideas.repec.org/p/jic/wpaper/117.html
   My bibliography  Save this paper

Intrageneration Poverty Dynamics in Indonesia: Households’ Welfare Mobility Before, During, and After the Asian Financial Crisis

Author

Listed:
  • Dartanto, Teguh
  • Otsubo, Shigeru

Abstract

When the economic crisis hit in 1998, and economic growth dropped by 13.7 percent; exacerbated by domestic political turbulence, poverty figures sharply rose from 17.47 percent to 24.20 percent. It began to decline again as the economy quickly recovered from the crisis. The above details demonstrate that poverty is not a pure static phenomenon, but rather is dependent on dynamic characteristics that easily change over time. Households could move into (or out of) poverty in response to fluctuations in the economy. This study then aims to analyze the determinants of households’ shifting welfare during the periods before, during and after the Asian financial crisis in Indonesia. Applying the spell approach of poverty experience and observing four waves of IFLS (Indonesian Family Life Survey) balanced panel datasets, we find that during 1993-1997 (pre-crisis) households could be classified as chronically poor (6.14 percent), transient poor (-) (6.31 percent), transient poor (+) (10.58 percent) and never poor (76.96 percent). However, during 1997-2000 (crisis), the probability of being transient poor (-) had jumped drastically from 5 percent (pre-crisis) to 14 percent (during the crisis). In the post crisis period, roughly 86 percent of the previously poor households could move out of poverty. This study also confirmed that the probability of being poor in the next period highly depends on past experiences with poverty. Moreover, reducing probability of being chronically poor by about half from 4.6 percent to 2.2 percent needs almost fifteen years. Furthermore, our estimations using the ordered logit model confirm that determinants of poverty dynamics include educational attainment, size of the household, share of education expenditure, distance to public transportation, ownership of livestock and liquid assets, and the impact suffered from earthquakes.

Suggested Citation

  • Dartanto, Teguh & Otsubo, Shigeru, 2016. "Intrageneration Poverty Dynamics in Indonesia: Households’ Welfare Mobility Before, During, and After the Asian Financial Crisis," Working Papers 117, JICA Research Institute.
  • Handle: RePEc:jic:wpaper:117
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10685/187
    Download Restriction: no

    File URL: https://jicari.repo.nii.ac.jp/?action=repository_uri&item_id=769&file_id=9&file_no=1
    Download Restriction: no

    References listed on IDEAS

    as
    1. Ingrid Woolard & Stephan Klasen, 2005. "Determinants of Income Mobility and Household Poverty Dynamics in South Africa," Journal of Development Studies, Taylor & Francis Journals, vol. 41(5), pages 865-897.
    2. Bigsten, Arne & Kebede, Bereket & Shimeles, Abebe & Taddesse, Mekonnen, 2003. "Growth and Poverty Reduction in Ethiopia: Evidence from Household Panel Surveys," World Development, Elsevier, vol. 31(1), pages 87-106, January.
    3. Grimm, Michael & Gräb, Johannes, 2007. "Robust Multiperiod Poverty Comparisons," Proceedings of the German Development Economics Conference, Göttingen 2007 8, Verein für Socialpolitik, Research Committee Development Economics.
    4. Armida Alisjahbana & Arief Anshory Yusuf, 2003. "Poverty Dynamics In Indonesia: Panel Data Evidence," Working Papers in Economics and Development Studies (WoPEDS) 200303, Department of Economics, Padjadjaran University, revised Jul 2003.
    5. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, March.
    6. Thomas, Duncan & Witoelar, Firman & Frankenberg, Elizabeth & Sikoki, Bondan & Strauss, John & Sumantri, Cecep & Suriastini, Wayan, 2012. "Cutting the costs of attrition: Results from the Indonesia Family Life Survey," Journal of Development Economics, Elsevier, vol. 98(1), pages 108-123.
    7. Dartanto, Teguh & Otsubo, Shigeru, 2013. "Measurements and Determinants of Multifaceted Poverty:Absolute, Relative, and Subjective Poverty in Indonesia," Working Papers 54, JICA Research Institute.
    8. repec:dau:papers:123456789/1562 is not listed on IDEAS
    9. Sawada Yasuyuki & Sugawara Shinya & Shoji Masahiro & Shinkai Naoko, 2014. "The Role of Infrastructure in Mitigating Poverty Dynamics: The Case of an Irrigation Project in Sri Lanka," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 14(3), pages 1-28, July.
    10. McCulloch, Neil & Calandrino, Michele, 2003. "Vulnerability and Chronic Poverty in Rural Sichuan," World Development, Elsevier, vol. 31(3), pages 611-628, March.
    11. Chant, Sylvia, 2003. "New contributions to the analysis of poverty: methodological and conceptual challenges to understanding poverty from a gender perspective," Asuntos de Género 47, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    12. Neil McCulloch & Bob Baulch, 2000. "Simulating the impact of policy upon chronic and transitory poverty in rural Pakistan," Journal of Development Studies, Taylor & Francis Journals, vol. 36(6), pages 100-130.
    13. Suryahadi, Asep & Suryadarma, Daniel & Sumarto, Sudarno, 2009. "The effects of location and sectoral components of economic growth on poverty: Evidence from Indonesia," Journal of Development Economics, Elsevier, vol. 89(1), pages 109-117, May.
    14. Wenefrida Widyanti & Asep Suryahadi & Sudarno Sumarto & Athia Yumna, 2009. "The Relationship between Chronic Poverty and Household Dynamics : Evidence from Indonesia," Microeconomics Working Papers 22554, East Asian Bureau of Economic Research.
    15. Gary Fields & Paul Cichello & Samuel Freije & Marta Menendez & David Newhouse, 2003. "Household income dynamics: a four-country story," Journal of Development Studies, Taylor & Francis Journals, vol. 40(2), pages 30-54.
    16. Mckay, Andrew & Lawson, David, 2003. "Assessing the Extent and Nature of Chronic Poverty in Low Income Countries: Issues and Evidence," World Development, Elsevier, vol. 31(3), pages 425-439, March.
    17. Dartanto, Teguh, 2013. "Why is growth less inclusive in Indonesia?," MPRA Paper 65136, University Library of Munich, Germany, revised 2014.
    18. Indunil De Silva & Sudarno Sumarto, 2014. "Does Economic Growth Really Benefit the Poor? Income Distribution Dynamics and Pro-poor Growth in Indonesia," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 50(2), pages 227-242, August.
    19. Arsenio Balisacan & Ernesto Pernia & Abuzar Asra, 2003. "Revisiting growth and poverty reduction in Indonesia: what do subnational data show?," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 39(3), pages 329-351.
    20. Daniel Suryadarma & Wenefrida Widyanti & Asep Suryahadi & Sudarno Sumarto, 2006. "From Access to Income : Regional and Ethnic Inequality in Indonesia," Development Economics Working Papers 22547, East Asian Bureau of Economic Research.
    21. Haddad, Lawrence & Ahmed, Akhter, 2003. "Chronic and Transitory Poverty: Evidence from Egypt, 1997-99," World Development, Elsevier, vol. 31(1), pages 71-85, January.
    22. Riyana Miranti, 2010. "Poverty in Indonesia 1984-2002: the impact of growth and changes in inequality," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 46(1), pages 79-97.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    chronic poor ; transient poor ; poverty dynamics ; panel data ; Asian financial ; crisis ; Indonesia;

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:jic:wpaper:117. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Japan International Cooperation Agency Library). General contact details of provider: http://edirc.repec.org/data/jicgvjp.html .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.