MEASURING INTERGENERATIONAL INCOME MOBILITY: A CASE STUDY OF INDONESIA
ROSYADHA, ADINDA AYU
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In the past decade, Indonesia has experienced a remarkable growth in GDP per capita, but also have an increasing trend of inequality. To address the economic inequality, this study figures out the equality of opportunity possessed by individuals through estimating the degree of intergenerational income mobility using data from Indonesia Family Life Survey (IFLS) from 1993-2014 and find out that intergenerational income elasticity (IGE) of Indonesia to be 0.166, which suggests that children’s income is affected by their father’s economic statuses in a low extent. A transition probabilities indicate that there is upward and downward mobility among income groups of Indonesian. Then, this study also finds that education has a power to affect the intergenerational income mobility. Education can be mentioned as one of the transmission channels which can describe as much as 73.49% of IGE.