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Individual Income Inequality and Its Drivers in Indonesia: A Theil Decomposition Reassessment

Published on Mar 1, 2016in Social Indicators Research1.70
· DOI :10.1007/s11205-015-0890-0
Aekapol Chongvilaivan6
Estimated H-index: 6
(ADB: Asian Development Bank),
Jungsuk Kim4
Estimated H-index: 4
(Sogang University)
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Abstract
This article employs a Theil decomposition analysis to examine various dimensions of income inequality, using the 2007 Indonesian Family Life Survey. The empirical strategy is based on the individual-level income data—instead of group means as in the existing literature—and thus accounts for within-group dispersion of individual incomes. The decomposition exercise reveals that income inequality across education levels constitutes about 13 % of total income inequality. The urban–rural and interprovincial dimensions individually explain 6.0–6.5 %, but the contribution of income inequality by genders appears to be negligible. The findings highlight educational reform as an effective redistributive policy.
  • References (36)
  • Citations (6)
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References36
Newest
Published on May 4, 2014in Bulletin of Indonesian Economic Studies1.52
Arief Anshory Yusuf12
Estimated H-index: 12
(UNPAD: Padjadjaran University),
Andy Sumner20
Estimated H-index: 20
('KCL': King's College London),
Irlan Adiyatma Rum2
Estimated H-index: 2
(UNPAD: Padjadjaran University)
In this article, we consider the recent increase in inequality in Indonesia. We make new, consistent estimates of expenditure inequality for 1993–2013, using several measures that draw on household expenditure data from the National Socioeconomic Survey (Susenas) for 1993–2013. In doing so, we note that the central statistics agency, Badan Pusat Statistik (BPS), used grouped data for its estimates of inequality until 2009 and that this underestimated inequality up to then. Thus the rise in inequ...
Published on May 4, 2014in Bulletin of Indonesian Economic Studies1.52
Indunil de Silva2
Estimated H-index: 2
,
Sudarno Sumarto16
Estimated H-index: 16
We explore the nexus between poverty, inequality, and economic growth in Indonesia between 2002 and 2012, using several pro-poor growth concepts and indices to determine whether growth in this period benefited the poor. Our regression-based decompositions of poverty into growth and redistribution components suggest that around 40% of inequality in total household expenditure in Indonesia was due to variations in expenditure by education characteristics that persisted after controlling for other ...
Published on Apr 1, 2013in Bulletin of Indonesian Economic Studies1.52
Kunta Nugraha2
Estimated H-index: 2
(UC: University of Canberra),
Phil Lewis5
Estimated H-index: 5
(UC: University of Canberra)
Indonesia has experienced significant economic growth in recent years (on average, 5% in 2000--08), but many people are still living in poverty. Income inequality, as measured by the official Gini coefficient, has also increased. This paper evaluates household income and income inequality in Indonesia, assessing both market and non-market income to reach a more accurate measure of how actual income affects living standards. We find that if household income considers non-market income, income dis...
Published on Mar 1, 2011in Asian Economic Journal0.20
Takahiro Akita12
Estimated H-index: 12
(International University of Japan),
Puji Agus Kurniawan1
Estimated H-index: 1
(Central Bureau of Statistics),
Sachiko Miyata1
Estimated H-index: 1
(African Development Bank)
This paper analyzes the changes in determinants of inter-provincial income inequality in Indonesia from 1983 to 2004 associated with structural changes using the bi-dimensional decomposition method of a population-weighted coefficient of variation. The method unifies two inequality decompositions by regional groups and GRP components (industrial sectors) and thus enables us to assess the contributions of GRP components to within-region and between-region inequalities, as well as to overall inequ...
Tommy Firman19
Estimated H-index: 19
The local†government proliferation practice, as an implementation of Indonesia's decentralization reform, has resulted in a fragmentation of regional development, in which many local government consider themselves of their own ‘kingdom of authority’. This attitude could in turn inhibit local and regional development. The phenomenon of Indonesia's local†government proliferation is unique, as not many countries in the world have experienced as rapid growth in regional proliferation as Indo...
Published on Mar 1, 2008in Economics & management series
Sumimaru Odano1
Estimated H-index: 1
(Shiga University),
Ziaul Abedin1
Estimated H-index: 1
(Shiga University)
Trends of trade disputes show that the developed countries are more active in the dispute settlement process of the World Trade Organization (WTO) than the developing countries. Our analyses show that financial strength is an important factor for countries to participate in the dispute settlement process of the WTO. It also plays significant role in winning trade disputes. Therefore, lack of financial strength could be an explanation for the low rate of participation of the small-developing coun...
Published on Jan 1, 2004
Arsenio M. Balisacan18
Estimated H-index: 18
,
Nobuhiko Fuwa11
Estimated H-index: 11
The purpose of this paper is to establish some basic facts about income inequality in the Philippines, with a special focus on the importance of spatial income inequality. Despite major fluctuations in macroeconomic performances, income inequality remained relatively stable during the years 1985-2000. Spatial inequality accounts for a sizable but not overwhelming portion of the national-level income inequality, and the relative importance of spatial inequality was declining over time. We also fi...
Published on Feb 1, 2003in Annals of Regional Science1.07
Takahiro Akita12
Estimated H-index: 12
(International University of Japan)
The objective of this paper is to present an inequality decomposition method, the two-stage nested Theil decomposition method, which is an extension of the ordinary one-stage Theil decomposition method. The method is analogous to a two-stage nested design in the analysis of variance (ANOVA). It considers the three-level hierarchical structure of a country: region-province-district, and decomposes overall regional inequality, as measured by Theil indices based on district-level mean incomes, into...
Cited By6
Newest
Published on Jan 1, 2019in Social Indicators Research1.70
Jude Okechukwu Chukwu6
Estimated H-index: 6
(UNN: University of Nigeria, Nsukka)
In an unequal and fragile economy such as Nigeria, providing for the extreme poor, marginalized, disadvantaged, less privileged and vulnerable is still seen by elites as providing for the unproductive segment. This notion seems to be one of the reasons why the elites in government have not done much to scale down poverty and inequality. The study estimates the poverty impact of variations in within-group and between-group inequality using two sequential household survey data, the harmonized nati...
Published on Jan 1, 2019in Social Indicators Research1.70
Miguel A. Márquez8
Estimated H-index: 8
(University of Extremadura),
Elena Lasarte1
Estimated H-index: 1
(University of Extremadura),
Marcelo Lufin1
Estimated H-index: 1
Spatial inequality measures should take into account the geographical position of the data of reference if the focus is on the spatial aspects of territorial inequality. However, these traditional spatial inequality measures like the Theil index do not distinguish among different locational situations. On the other hand, when analyzing the spatial decomposition of inequality, it is usual to express global inequality as a weighted sum of inequality values calculated for population subgroups (with...
Published on Nov 1, 2018in Journal of Informetrics3.88
Dengsheng Wu (CAS: Chinese Academy of Sciences), Lili Yuan1
Estimated H-index: 1
(CAS: Chinese Academy of Sciences)
+ 1 AuthorsJianping Li (CAS: Chinese Academy of Sciences)
Abstract The inequality in research funding is an important issue, in which the measurement of inequality is the basis. The literature has mostly investigated the inequality in research funding by providing overall values of inequality but has rarely explored this topic through the internal structure of the overall inequality. In this paper, a three-stage nested Theil index is employed to decompose the overall inequality in research funding into the between and within components. Moreover, a dec...
Published on Oct 1, 2018in Economics of Planning
This paper uses household survey data from five Southeast Asian countries (Cambodia, Indonesia, the Philippines, Thailand and Vietnam) to examine changes in the distribution of per capita consumption over the period 2006–2014. We perform a decomposition analysis to study the factors that contribute to changes in per capita consumption at the mean and along the entire distribution. Our findings indicate that changes in per capita consumption over time are mainly driven by changes in household inc...
Published on Aug 1, 2018in Social Indicators Research1.70
Takahiro Akita12
Estimated H-index: 12
(Rikkyo University),
Sachiko Miyata3
Estimated H-index: 3
(Rits: Ritsumeikan University)
This study analyzes spatial inequalities in Indonesia from 1996–2010 using the hierarchical decomposition method. It uses household expenditures rather than regional accounts and tries to investigate the contributions of spatial inequalities to overall expenditure inequality. We find that urban–rural disparity constitutes 15–25% of overall expenditure inequality. A large difference exists between urban and rural areas in the magnitude of inequality among districts. After controlling for the urba...
Published on Feb 1, 2018in Social Indicators Research1.70
Chi-Chuan Lee8
Estimated H-index: 8
(BNU: Beijing Normal University),
Chien-Chiang Lee36
Estimated H-index: 36
(NSYSU: National Sun Yat-sen University)
Abstract This paper investigates the influence of country risks, including economic, financial, and political risks, on income inequality for a broad sample of 110 countries. Our empirical results reveal that higher economic and political risks generally lead to higher inequality. Lower income country appears to have higher income inequality. Furthermore, with the consideration of the non-monotonic effect of country risk, the improvement of income distribution is only sustainable dynamically aft...