Riyana Miranti

Poverty in Indonesia 1984–2002: the impact of growth and changes in inequality

Abstract This paper examines the growth elasticity of poverty across three development episodes in Indonesia between 1984 and 2002, after controlling for inequality. It relies on estimation of panel data from the National Socio-Economic Survey conducted by the central statistics agency. Contrary to expectations, the growth elasticity of poverty was virtually indistinguishable across the three development episodes – a period of far-reaching policy liberalisation (1984–90); a second period of slower liberalisation (1990–96); and the period of recovery from the Asian financial crisis (1999–2002). Growth was pro-poor in all three periods, while the impact of growth on poverty was either augmented or offset by changes in inequality, depending on the period. Only during the first liberalisation period did a reduction in inequality serve to augment the impact of growth on poverty.

The Challenges of Combining Two Databases in Small-Area Estimation: An Example Using Spatial Microsimulation of Child Poverty

Spatial microsimulation techniques have become an increasingly popular way of fulfilling the need for generating small-area data estimates. However, the technique also poses numerous methodological challenges, including the utilisation of two different databases simultaneously to produce estimates of population characteristics at the local level. An important but neglected question is whether different distributions of key variables within these two databases may affect the validity of the spatial estimation results. This study uses the significant policy issue of small-area estimates of child poverty rates in Australia to examine this question. The different income distributions for families with children in the two databases and the consequent effect on child-poverty estimates are assessed, while the apparent validity of these synthetic small-area poverty rates is gauged.

Building a Static Spatial Microsimulation Model: Data Preparation

This chapter details issues and specific measures that need to be taken into account when preparing and harmonising sample survey and census data to build a spatial microsimulation model. Transforming and manipulating these data sources, so that they are as compatible as possible, will ensure that the spatial microsimulation technique being used is optimised and the output gained from the model will be as accurate as possible. Several processes and issues are discussed in this chapter, including data requirements and compatibility and data imputation.

The Role of Health Insurance Membership in Health Service Utilisation in Indonesia

In 2014, Indonesia implemented a new, nationwide, subsidised universal-coverage health insurance program, under which poor Indonesians do not pay to become members and others pay a relatively low fee. This program has created a national debate about the effectiveness of the ownership of health insurance in increasing the use of health services—particularly among the poor—given the limitations in their quantity and quality. Using membership data on different health insurance programs from the 2007 rounds of Susenas and Riskesdas, this article researches the impact of having health insurance on health service utilisation, by controlling the levels of quality and quantity of health services in the area. We argue that having health insurance increases health service utilisation by approximately eight percentage points when people feel sick (or by approximately five percentage points if we include those who do not feel sick).

Revisiting the Impact of Consumption Growth and Inequality on Poverty in Indonesia during Decentralisation

This article analyses the consumption growth elasticity and inequality elasticity of poverty in Indonesia, with a particular focus on the decentralisation period. Using provincial panel data, we show that the effectiveness of growth in alleviating poverty across provinces was greater during decentralisation—that is, between 2002 and 2010—than at any other point since 1984. The growth elasticity of poverty since 2002 is estimated to have been –2.46, which means that a 10% increase in average consumption per capita would have reduced the poverty rate by almost 25%. However, we also find that rising income inequality negated a quarter to a third of the 5.7-percentage-point reduction in the headcount poverty rate. This increasing inequality has contributed to a lower level of pro-poor growth than that maintained in Indonesia before decentralisation.

What matters in education: a decomposition of educational outcomes with multiple measures

ABSTRACT Significant variations in educational outcomes across both the spatial and socioeconomic spectra in Australia have been widely debated by policymakers in recent years. This paper examines these variations and decomposes educational outcomes into 3 major input factors: availability of school resources, socioeconomic background, and a latent factor that links to the specificities of the local education system such as efficiencies. The proposed method respects the multi-dimensional nature of educational outcomes by estimating structural parameters of an extended education production function with multiple outcome measures. The results indicate that all factors contribute to the variations. Nevertheless, socioeconomic factors dominate non-school-based measures such as the tertiary education enrolment rate. The study also reveals significant differences in education system efficiencies across areas, suggesting compounding factors are often responsible for poor educational performance.

Creating contestable banking market: the effect of changes in the regulatory structure in Indonesia

Banks have market power due to the existence of product differentiation, high switching costs, locational characteristics, banks specialised knowledge and segmented customers. Therefore, creating a contestable market is more realistic than establishing perfect competition. This study aims to examine the role of opening the market to create contestability. In the last 30 years, the industry experienced structural changes from a closed-regulated into open-less regulated industry. The Panzar-Rosse method is employed to estimate the degree of competition, find the market structure and assess the impact of opening the market to competition. This study found that in a free entry market, banks are more competitive. The potential entrants act as market discipline so it facilitates the creation of a contestable market as observed in 1989. On the other hand, the absence of potential entrants explains the lack of market discipline for the incumbents to operate efficiently in the 2000s.

Trust, sense of community, and civic engagement: Lessons from Australia

This article examines the association between trust, sense of community, and civic engagement, with a particular focus on the socioeconomic characteristics of individuals, using data from the Household, Income, and Labor Dynamics in Australia Survey. Through the use of panel logit and binary panel data models, we draw three core observations. First, there is evidence that trust is associated with civic engagement in Australia, particularly in the case of volunteering. Trust is a prerequisite for women to participate in volunteering but not for men, where a sense of community matters more. Second, a high sense of community matters for both types of participation, political and volunteering. Third, the relationships between trust, sense of community, and civic engagement are present among the Baby Boomer and Generation X generations but not the Generation Y generation, which participates differently. The study makes an important contribution to the literature by unmasking the gender and generation stories and debunking popular myths about the unwillingness of new Australians to engage in associative behavior.

Understanding the Relationships between Development Factors and Regional Poverty: What Have We Learned from Indonesia?

ABSTRACT This article examines factors that are associated with disparities in regional poverty in Indonesia during the second half of the decentralization decade, from 2006 to 2011. This study finds that types of income growth matter for poverty reduction, particularly growth in income from the nonfood crops and services sectors. Provision of clear water is significant for poverty reduction too. The research also finds that distance from the capital city of Jakarta matters, the longer distance contributes to an increase in poverty rates. Nevertheless, there have been no robust significant relationships between in-migration, out-migration, intergovernmental transfer, and poverty.