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Urban Inequality in Indonesia

Takahiro Akita () and Alit Pirmansah
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Alit Pirmansah: Central Bureau of Statistics, Indonesia

No EMS_2011_04, Working Papers from Research Institute, International University of Japan

Abstract: According to an inequality decomposition analysis by urban and rural sectors in Indonesia, urban inequality's contribution to overall inequality in per capita household expenditure has been increasing steadily with widening urban inequality and urbanization proceeding following globalization and financial/trade liberalization. According to the Theil T index, the contribution rose from 54% to 63% during the 1996-2002 period. Urban inequality is expected to play a more important role in overall inequality. This paper explores the determinants of urban inequality in Indonesia using monthly household consumption expenditure data for 1999, 2002, and 2005 from the National Socio-Economic Survey (Susenas). It focuses on educational differences as the major determinant, since according to previous studies in Asian countries they account for around 20-40% of overall inequality.

Keywords: Urban Inequality; Urbanization; Education; Theil Decomposition Analysis; Indonesia (search for similar items in EconPapers)
JEL-codes: O15 O18 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2011-02
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