nep-sea New Economics Papers
on South East Asia
Issue of 2013‒07‒20
nine papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Negotiations for the Trans-Pacific Partnership Agreement: Evaluation and Implications for East Asian Regionalism By Cheong, Inkyo
  2. The Evolution of Inequality in Indonesia 1990 - 2012 By Arief Anshory Yusuf; Irlan Adiyatma Rum
  3. Development in Education Sector: Are the Poor Catching Up? By Mohamad Fahmi; Ben Satriatna
  4. Labor market development in Indonesia Has it been for all? By Muhammad Purnagunawan; Victor Pirmana
  5. Health inequity in Indonesia: is it declining? By Pipit Pitriyan; Adiatma Y.M Siregar
  6. Living beyond $2 a day: How Indonesia has progressed By Arief Anshory Yusuf; Irlan Adiyatma Rum
  7. Whether or not the informal economy as an engine for poverty alleviation in Vietnam By Nguyen, Thi Minh Hieu; Nguyen, Thi Huong Giang; Vu, Thi Minh Ngoc; Nguyen, Viet Duc
  8. How is international student mobility shaping up? By OECD
  9. Productivity dispersion and the roles of quality of labour input and competition: A case of Vietnamese manufacturing sector By Doan, Tinh; Nguyen, Ha

  1. By: Cheong, Inkyo (Asian Development Bank Institute)
    Abstract: The Trans-Pacific Partnership (TPP) agreement seems to have reached a crossroads: it could either be a building block toward achieving economic integration in Asia and the Pacific, or trigger the formation of two large trade blocs which will work independently of one another. When the Government of Japan announced its participation in the TPP negotiations in March 2013, the partnership began to attract greater interest from other East Asian countries. This paper analyzes the progress and major issues regarding the current TPP negotiations which are being led by the United States, and draws implications for East Asian economic integration.
    Keywords: trans-pacific partnership; tpp; republic of korea; economic integration; asia pacific; east asian countries
    JEL: F15 F53 O53
    Date: 2013–07–12
  2. By: Arief Anshory Yusuf (Department of Economics, Padjadjaran University); Irlan Adiyatma Rum (Department of Economics, Padjadjaran University)
    Abstract: Using a long series of household level survey data,we calculated various indicators of income inequality to look at the long-run evolution of inequality in Indonesia for the period of 1990 to 2012. We found that over that particular period inequality in Indonesia has been rising quite significantly. However, the rise in the inequality is predominantly driven by the rising trend for the last 10 years after the Asian Financial Crisis or in the era of political reform and democratization. Before that period, inequality was relatively stable at the moderate level. The magnitude of the more recent rising inequality is rather spectacular. In ten years toward 2012, Gini coefficient and the decile dispersion ratio has increased by roughly 20% and 50% respectively. The rising inequality are more or less common across regional dimension, urban-rural or Java and non-Java regions. Moreover, we also found an inequality convergence across provinces in which the change in inequality was faster, the lower the initial level of the province's inequality. We found, however, no strong evidences of increasing inter-regional inequality in Indonesia for the same period.
    Keywords: inequality, Indonesia
    JEL: D63
    Date: 2013–07
  3. By: Mohamad Fahmi (Department of Economics, Padjadjaran University); Ben Satriatna (Department of Economics, Padjadjaran University)
    Abstract: We use The National Socioeconomic Survey (SUSENAS) data from 1992 to 2012, to describe the condition of education development in Indonesia before and after the Reform Era. Historical data on education of Indonesia shows that this country has made a remarkable achievement in education development, which is indicated by a significant improvement on several education indicators. However, 1997-1998 Asian crisis is believed had slowed down the development of education sector in Indonesia. Three indicators areused in this study to measure the performance of education development, which are yearly schooling, net enrollment rate, and literacy rate. We found the gap of years of school between gender, region and income group is getting narrowed in the reform era. The net enrollment rate of all level of education also improved between 1992 and 2012. The gap between gender, region and income group also tends to be narrowed. However, we find that in several conditions the gap tends to be widened after the crisis. First case is between urban and rural people at elementary school. Second case is between income groups at elementary school. Third is between male and female at senior high school. Finally, the case is between income groups at tertiary education level. Literacy rate indicator also shows an improvement. The gap between different groups of people is also getting narrowed, except the gap between the rich and the poor. It tends to be widened after the crisis. The last indicator which is dropout rate also shows an improvement without interrupted by crisis. However, this is only happened at elementary school level. For the other level, the condition happened in different way. The gap between different groups of people is also narrowed after the reform era.
    Keywords: Education, Poverty, Indonesia
    JEL: I24 I28
    Date: 2013–07
  4. By: Muhammad Purnagunawan (Department of Economics, Padjadjaran University); Victor Pirmana (Department of Economics, Padjadjaran University)
    Abstract: This paper look at the long-run evolution of various labor market indicators in Indonesia over the period of 1992 to 2012 using the National Socioeconomic Survey (SUSENAS) data to describe the development before and after the reform era. Four indicators are used in this study to measure the labor market performance, which are formality rate,working poor rate, not in employment and education rate and child labor rate. Those indicators are calculated by per capita expenditure quintile to capture the equity aspect of labor market development. In addition, we also analyze in more detail the labor market condition in urban andrural separately. We found that while in general there have been some improvement during the period,there is a widening gap in some of the indicators especially in the formality rate betweenthe poor and other income class over that particular period that need special attention. Highincrease in the minimum wages and more rigid labor regulation in the beginning of decentralization era and also economic crisis might explain part of the widening gap. Furthermore, there are also serious and persistence problem in the quality of jobs in Indonesia, where having a job is not ensuring people out of poverty.
    Keywords: Employment, Formal Sector, Indonesia
    JEL: D63
    Date: 2013–07
  5. By: Pipit Pitriyan (Department of Economics, Padjadjaran University); Adiatma Y.M Siregar (Department of Economics, Padjadjaran University)
    Abstract: Indonesia significant progress in health outcomes is followed by significant issues, among them are the issues of inequities and inequalities. These two issues are known to be an important part in achieving plausible health outcome. This study attempts to observe disparity reduction and its acceleration rate in selected health indicators (i.e. access to improved water source and sanitation facility, first-child birth attended by health care worker) over a period of the last 15 years. We analyze the health indicators by clusters of expenditure quintile and regions (urban - rural, Java - non Java, KTI - non KTI). Our analyses have shown some key observations. First, the national figures show improvement for all indicators except for the percentage of population suffering from diarrhea (seemed worsening). However, the rate of improvement remained stagnant and there was no acceleration. Second, the gap reduction between the rich and the poor in terms of health access and status seemed to slow down or even widened during the post reformation era. Third, the health indicators movement trend by region did not seem to have a pattern and the gap between richer and poorer areas exist in some indicators and nonexistent in others (the widest gap is found between urban and rural areas.). Where it existed, however, the condition persisted along the period of observation.
    Keywords: inequality, inequity, health, Indonesia
    JEL: I14 I15
    Date: 2013–07
  6. By: Arief Anshory Yusuf (Department of Economics, Padjadjaran University); Irlan Adiyatma Rum (Department of Economics, Padjadjaran University)
    Abstract: Using a long series of household level survey data and more information on regional variation in the poor's living cost and inflation, we estimated the proportion of people living below 2005 PPP $2 a day. We found that for the period of 1990 to 2012, the $2 poverty incidence has been declining at an average rate of 2.2% per year leaving only 36.5% in 2012. The rate of the decline in the last ten years (or reformasi era, 2002-2012) has been faster (2.9% a year) than during the pre-reformasi era or the period of 1990-1996 (1.4% a year). This is in contrast to a rather slow rate of the decline in the poverty incidence with national poverty line during the reformasi era which was only 0.65% a year. We also found thatthe $2 poverty has been more concentrated among informal labor and agricultural workers. The difference between $2 poverty incidence in formal and informal labor was larger during the reformasiera, a sign that the informal labor has been rather left behind. During the reformasi era, the economic growth was a lot more income-inequalizing and a lot less pro-poor relative to growth during the period before the reformasiera. This applies to both the poor defined as those living below national poverty line or those living below $2 a day.
    Keywords: poverty, $2 per day, Indonesia
    JEL: J21
    Date: 2013–07
  7. By: Nguyen, Thi Minh Hieu; Nguyen, Thi Huong Giang; Vu, Thi Minh Ngoc; Nguyen, Viet Duc
    Abstract: This paper examines impacts of income from informal employment and informal sector employment on poverty in Vietnam to define whether the informal economy is an accelerator or a decelerator of poverty. Using data from Vietnam Household Living Standard Surveys, we find that although income from informal sources does not account for a large proportion to total income of the poor households in comparison with the non-poorhouseholds, it significantly contributes to poverty reduction. Without earnings from informal sources, 33.4 per cent of the surveyed households in 2010 live under the poverty line and this rate is only 10.34 per cent if informal income is added up. Both probit and quantile analysis affirms that informal earnings significantly mitigate poverty. Interesting findings from quantile regression are that informal earnings have divergent effects across distribution of household income. Particularly, it is a factor reducing poverty in poor households but it negatively affects the economic capacity of the rich households. The policy implication derived from empirical results is that poverty program should be associated with supporting policy for informal employees with low income so that they can improve their living standards.
    Keywords: informal economy, poverty
    JEL: I32 O17
    Date: 2013–07–17
  8. By: OECD
    Abstract: Between 2000 and 2011, the number of international students has more than doubled. Today, almost 4.5 million tertiary students are enrolled outside their country of citizenship. The largest numbers of international students are from China, India and Korea. Asian students account for 53% of all students studying abroad worldwide. New players have emerged on the international education market in the past decades, such as Australia, New Zealand, Spain, the Russian Federation and, more recently, Korea. By contrast, the share of international students in some of the most attractive countries – Germany and the United States, for instance – has declined. As countries increasingly benefit from student mobility, the competition to attract and retain students has diversified the map of destinations over the past decade.
    Date: 2013–07
  9. By: Doan, Tinh; Nguyen, Ha
    Abstract: This paper examines the roles of cost of labour input and competition on productivity dispersion in the Vietnamese manufacturing sector. We look at the effect accounting for labour input quality has on explaining productivity dispersion. This paper tests the hypothesis that mismeasurement of labour input may play a role in large productivity dispersion. We use the cost of labour input of firms as a proxy measure of labour input quality to examine whether incorporating this measure accounts for a part of the productivity dispersion. The paper also examines the role of competition in the extent of productivity dispersion.
    Keywords: productivity dispersion, competition, labour input, transition economies
    JEL: J24 L1 L25 P27
    Date: 2013–07–16

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