Working Paper on Equality of Opportunity in Indonesia

Working Paper on Equality of Opportunity in Indonesia

Date: 
Thursday, August 31, 2017
Type: 
Manuals, guidelines, training materials
Abstract

Indonesia has experienced an unprecedented rise in inequality in income over the last two decades. Yet, the extent of inequality of opportunities and how it progresses over time is little understood. This paper analyzes data from various sources and over a span of at least 15 years to better understand the status and trend of inequality of opportunities in Indonesia. The finding suggests that between 2000-2015, there is a strong evidence of a rise in inequality of opportunity in various dimensions, such as health, education and employment. It shows, for example, that although development achievements have been positive on average in all areas of interest, mixed progress has been seen in the convergence of groups within Indonesian society. For example, the gap in the number of schooling years between the top 10 percent and the bottom 40 percent is quite large and seems to have worsened during the last 15 years. In the health sector, interregional disparities (both within and outside Java, and between urban and rural areas) are still large and have persisted over time. Access to water and sanitation between income groups (the top 10 percent to the bottom 40 percent) is also very unequal. Lastly, in the area of employment, the degree of formality in the Indonesian labor market, even in the national average, has not improved for the last 15 years. Informality also remains concentrated in non-Java and rural areas, as well as within the poorest 40 percent of the population. Policy recommendations are discussed.

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