Structural Changes and Regional Income Inequality in Indonesia: A Bi-dimensional Decomposition Analysis

Takahiro Akita, Puji Kurniawan and Sachiko Miyata
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Puji Kurniawan: Central Bureau of Statistics, Indonesia

No EMS_2009_13, Working Papers from Research Institute, International University of Japan

Abstract: 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 inequality. As the share of mining has decreased, the spatial distribution of manufacturing has played a more important role in the inequality of Sumatra and Kalimantan, while the primacy of Jakarta, with strong urbanization economies, facilitated by globalization and trade and financial liberalization, has determined much of Java-Bali's inequality and, therefore, overall inequality in Indonesia.

Keywords: Structural Change; Regional Income Inequality; Indonesia; Bi-dimensional Decomposition; Weighted Coefficient of Variation (search for similar items in EconPapers)
JEL-codes: O18 R11 R12 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2009-08
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https://www.iuj.ac.jp/workingpapers/index.cfm?File=EMS_2009_13.pdf First version, 2009 (application/pdf)

Related works:
Journal Article: Structural Changes and Regional Income Inequality in Indonesia: A Bidimensional Decomposition Analysis (2011)
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