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Living beyond $2 a day: How Indonesia has progressed

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  • Arief Anshory Yusuf

    () (Department of Economics, Padjadjaran University)

  • Irlan Adiyatma Rum

    () (Department of Economics, Padjadjaran University)

Abstract

Using a long series of household level survey data and more information on regional variation in the poor's living cost and inflation, we estimated the proportion of people living below 2005 PPP $2 a day. We found that for the period of 1990 to 2012, the $2 poverty incidence has been declining at an average rate of 2.2% per year leaving only 36.5% in 2012. The rate of the decline in the last ten years (or reformasi era, 2002-2012) has been faster (2.9% a year) than during the pre-reformasi era or the period of 1990-1996 (1.4% a year). This is in contrast to a rather slow rate of the decline in the poverty incidence with national poverty line during the reformasi era which was only 0.65% a year. We also found thatthe $2 poverty has been more concentrated among informal labor and agricultural workers. The difference between $2 poverty incidence in formal and informal labor was larger during the reformasiera, a sign that the informal labor has been rather left behind. During the reformasi era, the economic growth was a lot more income-inequalizing and a lot less pro-poor relative to growth during the period before the reformasiera. This applies to both the poor defined as those living below national poverty line or those living below $2 a day.

Suggested Citation

  • Arief Anshory Yusuf & Irlan Adiyatma Rum, 2013. "Living beyond $2 a day: How Indonesia has progressed," Working Papers in Economics and Development Studies (WoPEDS) 201313, Department of Economics, Padjadjaran University, revised Jul 2013.
  • Handle: RePEc:unp:wpaper:201313
    as

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    File URL: http://ceds.feb.unpad.ac.id/wopeds/201313.pdf
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    References listed on IDEAS

    as
    1. Aswicahyono, Haryo & Narjok, Dionisius, 2011. "Indonesian Industrialization," WIDER Working Paper Series 053, World Institute for Development Economic Research (UNU-WIDER).
    2. 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.
    3. Ravallion, Martin & Chen, Shaohua, 2003. "Measuring pro-poor growth," Economics Letters, Elsevier, vol. 78(1), pages 93-99, January.
    4. Chris Manning & Kurnya Roesad, 2006. "Survey of recent developments," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 42(2), pages 143-170.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    poverty; $2 per day; Indonesia;

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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