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Urbanization, educational expansion, and expenditures inequality in Indonesia in 1996, 1999, and 2002

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  • Akita, Takahiro
  • Miyata, Sachiko

Abstract

"This paper considers urban-rural location and education as the main causes of expenditure inequality and attempts to examine inequality changes associated with urbanization and educational expansion in Indonesia from 1996 to 2002, using Indonesian monthly household consumption expenditure data. It introduces a hierarchical framework of inequality decomposition by population subgroups, which enables researchers to analyze inequality resulting from differences in educational attainment as well as inequality within each educational group, after the effects on inequality of urban–rural differences in the composition of educational attainments are removed. It finds that the urban sector's higher educational group contributes significantly to overall inequality. Inequality within the group increased significantly once Indonesia recovered from the financial crisis of 1998. This, together with educational expansion in urban areas, led to a conspicuous rise in urban inequality. Overall expenditure inequality has increased markedly, due not only to the rise in urban inequality but also a widening urban-rural disparity, accompanied by a population shift from the rural to the urban sector. Since more people will obtain higher education as the economy continues to develop, and more jobs requiring specialized skills become available in urban areas, urban inequality is likely to remain high. In order to mitigate urban inequality and thus overall inequality, the government needs to introduce policies that could reduce inequality among households whose heads have a tertiary education." from Authors' Abstract

Suggested Citation

  • Akita, Takahiro & Miyata, Sachiko, 2007. "Urbanization, educational expansion, and expenditures inequality in Indonesia in 1996, 1999, and 2002," IFPRI discussion papers 728, International Food Policy Research Institute (IFPRI).
    • Handle: RePEc:fpr:ifprid:728
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    References listed on IDEAS

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    Cited by:

    1. Mitsuhiko Kataoka, 2016. "Interprovincial efficiency differentials in Indonesia's pre-and post-crisis economy," ERSA conference papers ersa16p412, European Regional Science Association.
    2. Perdamen Sagala & Takahiro Akita & Arief Yusuf, 2014. "Urbanization and expenditure inequality in Indonesia: testing the Kuznets hypothesis with provincial panel data," Letters in Spatial and Resource Sciences, Springer, vol. 7(3), pages 133-147, October.
    3. Takahiro Akita & Sachiko Miyata, 2013. "The roles of location and education in the distribution of economic well-being in Indonesia: hierarchical and non-hierarchical inequality decomposition analyses," Letters in Spatial and Resource Sciences, Springer, vol. 6(3), pages 137-150, November.
    4. Xiaobing Le & Xinxin Shao & Kuo Gao, 2023. "The Relationship between Urbanization and Consumption Upgrading of Rural Residents under the Sustainable Development: An Empirical Study Based on Mediation Effect and Threshold Effect," Sustainability, MDPI, vol. 15(10), pages 1-19, May.
    5. Andy Sumner & Peter Edward, 2013. "From Low Income, High Poverty to High-Income, No Poverty? An Optimistic View of the Long-Run Evolution of Poverty in Indonesia By International Poverty Lines, 1984–2030," Working Papers in Economics and Development Studies (WoPEDS) 201310, Department of Economics, Padjadjaran University, revised Jun 2013.
    6. Andy Sumner & Peter Edward, "undated". "Dari Pendapatan Rendah dan Kemiskinan Tinggi menuju Pendapatan Tinggi Tanpa Kemiskinan? Pandangan Optimistis Evolusi Kemiskinan Jangka Panjang di Indonesia Menurut Garis Kemiskinan Internasional, 1984," Working Papers 3438, Communications Section.
    7. Mitsuhiko Kataoka, 2022. "Cyclical shocks and spatial association of Indonesia's district‐level per capita income," Asian Economic Journal, East Asian Economic Association, vol. 36(3), pages 261-287, September.
    8. Arief Anshory Yusuf & Andy Sumner & Irlan Adiyatma Rum, 2014. "Twenty Years of Expenditure Inequality in Indonesia, 1993-2013," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 50(2), pages 243-254, August.
    9. Mitsuhiro Hayashi & Mitsuhiko Kataoka & Takahiro Akita, 2014. "Expenditure Inequality in Indonesia, 2008–2010: A Spatial Decomposition Analysis and the Role of Education," Asian Economic Journal, East Asian Economic Association, vol. 28(4), pages 389-411, December.
    10. Mitsuhiko Kataoka, 2015. "Interprovincial differences in the endowment and utilization in labour force by educational attainment in Indonesia's post-crisis economy," ERSA conference papers ersa15p878, European Regional Science Association.
    11. Takahiro Akita & Sachiko Miyata, 2018. "Spatial Inequalities in Indonesia, 1996–2010: A Hierarchical Decomposition Analysis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 138(3), pages 829-852, August.
    12. Andi Syah Putra & Guangji Tong & Didit Okta Pribadi, 2020. "Food Security Challenges in Rapidly Urbanizing Developing Countries: Insight from Indonesia," Sustainability, MDPI, vol. 12(22), pages 1-20, November.
    13. Mitsuhiko Kataoka, 2018. "Inequality convergence in inefficiency and interprovincial income inequality in Indonesia for 1990–2010," Asia-Pacific Journal of Regional Science, Springer, vol. 2(2), pages 297-313, August.
    14. Andy Sumner & Peter Edward, "undated". "From Low Income, High Poverty to High-Income, No Poverty? An Optimistic View of the Long-Run Evolution of Poverty in Indonesia By International Poverty Lines, 1984–2030," Working Papers 287, Communications Section.
    15. Yueyan Dong & Nannan Yu & Tao Hong & Jinxing Yue, 2022. "City Administrative Level and Tertiary Educational Opportunities: Evidence From China’s Higher Education Expansion Policy," SAGE Open, , vol. 12(2), pages 21582440221, April.
    16. Takahiro Akita, 2017. "Educational Expansion and the Role of Education in Expenditure Inequality in Indonesia Since the 1997 Financial Crisis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 130(3), pages 1165-1186, February.
    17. Dorji Lethro & Takahiro Akita, 2016. "Education and Expenditure Inequality in Bhutan: An Analysis based on 2007 and 2012 Household Survey Data," Working Papers EMS_2016_12, Research Institute, International University of Japan.

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    Keywords

    Expenditure inequality; Urbanization; Educational expansion; Theil index; Two-stage nested inequality decomposition analysis; Public investment;
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