The relationship between trade liberalisation, poverty and inequality: the case of Indonesia Online publication date: Sun, 23-Sep-2018
by Muhammad Sofjan
International Journal of Economic Policy in Emerging Economies (IJEPEE), Vol. 11, No. 5, 2018
Abstract: We provide a detailed investigation of the relationship between trade liberalisation, poverty and inequality in Indonesia by using provincial panel data from urban-rural regions. We use three models: an income model, a Gini model and a poverty model. The results were analysed using a simultaneous equations model and a data panel. After testing and analysing, it can be concluded that liberalisation of trade in Indonesia has proven to be able to lift most of the poor above the poverty line by creating job vacancies due to trade relations. However, trade is not able to reduce income inequality in Indonesia. Factors which significantly affect the level of inequality in Indonesia are the ratio of the number of workers in the non-governmental sector and the infrastructure, while the degree of trade openness and income growth is not significantly associated with inequality. Trade openness in Indonesia does not affect inequality.
Online publication date: Sun, 23-Sep-2018
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Economic Policy in Emerging Economies (IJEPEE):
Login with your Inderscience username and password:
Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.
If you still need assistance, please email firstname.lastname@example.org