Top Incomes in Indonesia, 1920-2004

Andrew Leigh () and Pierre van der Eng ()

No 549, CEPR Discussion Papers from Centre for Economic Policy Research, Research School of Social Sciences, Australian National University

Abstract: Using taxation and household survey data, this paper estimates top income shares for Indonesia during 1920-2004. Our results suggest that top income shares grew during the 1920s and 1930s, but fell in the post-war era. In more recent decades, we observe a sharp rise in top income shares during the late-1990s, coincident with the economic downturn, and some evidence that top income shares fell in the early-2000s. For pre-war Indonesia, we decompose top income shares by income source, and find that for groups below the top 0.5 percent, a majority of income was derived from wages. Throughout the twentieth century, top income shares in Indonesia have been higher than in India, broadly comparable to Japan, and somewhat lower than levels prevailing in the United States.

Keywords: inequality; top incomes; personal income taxation; Indonesia (search for similar items in EconPapers)
JEL-codes: H24 N35 O15 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cwa, nep-dev, nep-his, nep-pbe and nep-sea
Date: Written 2007-03
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