Indonesia

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Overview of Trends of Economic Inequality in Indonesia

 

Has the dispersion of earnings been increasing in recent decades?No evidence
Has overall inequality increased in recent years?Yes, the Gini coefficient (from expenditure data) has risen by 4 percentage points from 1987 to 2007.
Have there been periods when overall inequality fell for a sustained period?Yes, the Gini coefficient fell from 1964 to 1987.
Has poverty been falling or rising in recent decades?Falling. The share of individual living in absolute poverty went from 47 in mid-1970s to 14 percent in 2009.
Has there been a U-pattern for top income shares over time?Insufficient evidence
Has the distribution of wealth followed the same pattern as income?No evidence
Additional noteworthy features

Sources and References

Sources for the historical data series:

Overall inequality: Gini coefficient for household per capita expenditure from the website of Badan Pusat Statistik (Statistics Indonesia), consumption and expenditure/selected consumption indicators since 2002; earlier observations from Booth (2000, Table 1), and Krongkaew and Ragayah (2006, Table 2).

Top income shares: Share of top 1 per cent and 0.05 per cent in total gross income from WTID, based on work of Leigh and van der Eng (2010).

Poverty: Percentage with expenditure below official absolute poverty line (see Asra, 2000) for total population (rural and urban) from Perkembangan Beberapa Indikator Utama Sosial-Ekonomi Indonesia (Trends of the Selected Socio-Economic Indicators of Indonesia), October 2009, Table 5.4 (and total population figures from Table 2.1), linked backwards at 1999 and 1996, and linked backwards at 1980 to the estimates for 1976 and 1978 in Booth (1993, Table 5).

Individual earnings: no suitable data were found. Wealth: no suitable data were found.

References:

  • Asra, A, 2000, “Poverty and inequality in Indonesia”, Journal of the Asia Pacific Economy, vol 5: 91-111.
  • Asra, A, 1989, “Inequality trends in Indonesia, 1969-1981: A Re-Examination”, Bulletin of Indonesian Studies, vol 25: 100-110.
  • Booth, A, 1993, “Counting the poor in Indonesia”, Bulletin of Indonesian Studies, vol 29: 53-83.
  • Krongkaew, Medhi and Ragayah, Haji Mat Zin, 2006, “Income distribution and sustainable economic development in East Asia: A comparative analysis”, paper available from EADN Network.
  • Leigh, A and van der Eng, P, 2010, “Top incomes in Indonesia, 1920-2004” in A B Atkinson and T Piketty, editors, Top incomes: A global perspective, Oxford University Press, Oxford.
  • Miranti, R, 2010, “Poverty in Indonesia 1984-2002: The impact of growth and changes in inequality”, Bulletin of Indonesian Studies, vol 46: 79-97.
  • Sundrum, R M, 1979, “Income distribution, 1970-76”, Bulletin of Indonesian Studies, vol 15: 137-141.