Judul: The Impact of Changing Economic Structure on Distribution Income Inequality In Indonesia.
Abstrak: Economic development does not solely pursuit the economic growth, but it must also create a more equitable distribution of income among the people. During 2002-2011, both at nationally and at the provincial level, the level of income distribution inequality in Indonesia remains high and continues to increase. Even in 2011 the Indonesian average gini index reached 0.41 which is the highest gini index that Indonesia has. Mean while, the Indonesian economy has been undergoing structural changes, which is marked by the declining of the primary sector’s contribution and the increasing contribution of other sectors. It can be seen from the data of Indonesian GDP during the 2002 to 2011 period. Most provinces in Indonesia experienced changes of contribution and some provinces had changes of the dominant sectors, although there are some provinces which had not experienced a change in their economic structure. Based on the problems mentioned above, this study’s aims are: 1) analyze the pattern of changes in the economic structure and the pattern of income distribution in Indonesia, and 2) to analyze the impact of changes in the economic structure on the income distribution in Indonesia. This study uses secondary data from Indonesian BPS and other relevant sources. The analyzed data were in the form of panel data which were derived from the period in 2002-2011 and from 33 provinces in Indonesia. The data used are the GDP, GRDP, Susenas, GRDP per capita, gini index, economic growth, and other supporting data. This study uses descriptive and static panel data regression analysis. Economic structure are grouped into three main sectors, namely: 1) the primary sector, which consists of subsector of agriculture, mining and quarrying; 2) the secondary sector, which consists of subsector of processing industry, electricity, natural gas, water and construction; 3) the tertiary sector, which consists of subsector of trade, hotels and restaurants, transport and communications, finance, business services, and other services. The provinces are grouped into developed and developing regions. Provinces with the per capita income above the national are categorized as developed, while some other provinces with per capita income below the national are categorized as developing. During the 10 years period from 2002 to 2011, there wasn’t any change in the economic structure based on the dominant sector in Indonesia. The tertiary sector was still dominating, followed by the secondary and primary sector. Hence there were economic structural changes based on their contribution in each sector with a tendency of increasing in tertiary sector and declining in primary sector. In contrast to what happened nationally, at the provincial level, there were economic structural changes both in terms of dominance and sectoral relative contribution during that period. All provinces in Indonesia experienced economic structural changes in terms of contribution, while based on dominant sector, there were some provinces that experienced changes in economic structure, both in the developed and developing regions. In developing areas, the economic structural change occurred all sectors from the primary sectors to the tertiary sectors, with a pattern of declining in primary sectors, increasing in tertiary sectors and relatively constant in the secondary sectors.
Keyword: Changes in economic structure, income distribution, inequality, gini index, the data panel, fixed effect model