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Pandemic-induced de-urbanisation in Indonesia

Peter Warr and Arief Yusuf

Departmental Working Papers from The Australian National University, Arndt-Corden Department of Economics

Abstract: The COVID-19 pandemic has affected Indonesia severely. It was initially an urban event, but the loss of urban jobs has induced a large urban to rural migration, which we call de-urbanisation. This phenomenon temporarily reversed the long-term process of rural to urban reallocation of labour. In early 2021 the approximate size of this de-urbanisation was known, but not its effects. This paper analyses the general equilibrium consequences of this overlooked feature of the pandemic. The analysis shows that taking deurbanisation into account, the negative economic impact of the pandemic is largest among rural, not urban households, especially the poorest.

Keywords: De-industrialisation; Indonesia; COVID-19; structural change; rural poverty; urban poverty; inequality. (search for similar items in EconPapers)
JEL-codes: I15 O12 O53 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2021
New Economics Papers: this item is included in nep-ore, nep-res, nep-sea and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:pas:papers:2021-08

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