A Reassessment of Inequality and Its Role in Poverty Reduction in Indonesia

This study provides an overview of inequality trends in Indonesia for the period from 1984 to 2002. Different from previous studies on inequality in Indonesia, we use data on household consumption expenditure that takes into account price differentials across regions. We found that, although all measures indicate a decrease in inequality during the economic crisis, it actually increased for those below the poverty line. We also found that because inequality during the peak of the crisis in 1999 was at its lowest level in 15 years, the poverty rate decreased very rapidly during the recovery between 1999 and 2002