Top Incomes in Indonesia, 1920-2004

39 Pages Posted: 20 Feb 2007

See all articles by Andrew Leigh

Andrew Leigh

Australian House of Representatives Parliament House; Centre for Applied Macroeconomic Analysis, ANU; IZA

Pierre van der Eng

Australian National University - College of Business & Economics

Date Written: February 2007

Abstract

Using taxation and household survey data, this paper estimates top income shares for Indonesia during 1920-2004. Our results suggest that top income shares grew during the 1920s and 1930s, but fell in the post-war era. In more recent decades, we observe a sharp rise in top income shares during the late-1990s, coincident with the economic downturn, and some evidence that top income shares fell in the early-2000s. For pre-war Indonesia, we decompose top income shares by income source, and find that for groups below the top 0.5 percent, a majority of income was derived from wages. Throughout the twentieth century, top income shares in Indonesia have been higher than in India, broadly comparable to Japan, and somewhat lower than levels prevailing in the United States.

Keywords: inequality, top incomes, personal income taxation, Indonesia

JEL Classification: H24, N35, O15

Suggested Citation

Leigh, Andrew and van der Eng, Pierre, Top Incomes in Indonesia, 1920-2004 (February 2007). Available at SSRN: https://ssrn.com/abstract=963537 or http://dx.doi.org/10.2139/ssrn.963537

Andrew Leigh (Contact Author)

Australian House of Representatives Parliament House ( email )

Canberra, 2600
Australia

Centre for Applied Macroeconomic Analysis, ANU ( email )

ANU College of Business and Economics
Canberra, Australian Capital Territory 0200
Australia

IZA ( email )

Pierre Van der Eng

Australian National University - College of Business & Economics ( email )

Research School of Management
26C Kingsley Street
Acton, ACT 2601
Australia
+61 2 6125 5438 (Phone)
+61 2 6125 8796 (Fax)

HOME PAGE: http://https://www.cbe.anu.edu.au/about/staff-directory/?profile=Pierre-van%20der%20Eng

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