Intragenerational Economic Mobility in Indonesia: A Transition from Poverty to the Middle Class in 1993–2014

Teguh Dartanto, Faizal Rahmanto Moeis, Shigeru Otsubo

Research output: Contribution to journalArticlepeer-review

15 Citations (Scopus)

Abstract

Economic mobility, especially through expansion of the middle class, will dominate the future of Indonesia’s development agenda. Based on data from five waves of the Indonesia Family Life Survey (IFLS), we found that (1) poverty decreased significantly between 1993 and 2014, from 86.1% to 20.2%, while the middle class grew by almost nine times; (2) 34.4% of the poor moved into the middle class, but 11.9% were still categorised as chronically poor; (3) 42.3% of the middle class did not move into the upper class; (4) the middle and upper classes are vulnerable and easily fall into the lower classes. Our econometric estimations confirm that the drivers of economic mobility are educational attainment, formal employment, water and electricity supply, land ownership, and health investment. These findings suggest that investment in human and physical capital are the two main strategies to expand the middle class.

Original languageEnglish
Pages (from-to)193-224
Number of pages32
JournalBulletin of Indonesian Economic Studies
Volume56
Issue number2
DOIs
Publication statusPublished - 3 May 2020

Keywords

  • economic mobility
  • intragenerational
  • middle class
  • poverty
  • poverty dynamics
  • transient poverty
  • upper class

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