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The cost of inequalityArief Anshory Yusuf
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Source: CIA, World Fact Book, 2013, World Bank WDI, and author’s calculation
Indonesia can be categorized as a country of high inequality and low income, ..
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Among developing countries, the increase in Indonesian inequality over the last decade is among the highest, while most others declined.
Source: World Bank Poverty & Inequality DatabaseNote: The inequality indicators are three-years average where data available.
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Current status of Indonesian regional development (2012)Sumatra
Java
Bali NT
Kalimantan
Sulawesi
Maluku Papua
0
10
20Sumatera
Jawa
Bali NT
Kalimantan
Sulawesi
Maluku Papua
0
20
40
GDP Per Capita (Rp million) Poverty incidence (%)
60% of Indonesian GDP generated in Java Jakarta per capita income is 46 times of Maluku province Poverty incidence in Papua is 31%, Jakarta is 3.7%
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Trend in inter-regional disparity (2007-2012)
0 5 10 15 20 25 30 35 40
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
-1.0
4.94.5
3.7
4.7 4.65.04.5
2.1
4.7
3.8
5.3
3.8
5.5
3.0
3.8
4.54.4
3.7
0.4
6.76.56.26.1
5.2
2.1
3.33.43.6
4.3
GDP per capita in 2007 (Million 2000 Rupiahs)
Ann
ual c
hane
200
7-20
08
0 5 10 15 20 25 30 35 40 45
-2.5
-2
-1.5
-1
-0.5
0
-1.438
-0.646-0.742
-0.596
-0.37
-1.074
-0.886
-1.202
-0.802
-0.638
-0.184
-0.692
-1.018
-0.588
-1.316
-0.644
-0.49
-1.272-1.326
-0.948
-0.574
-0.39
-0.872
-0.648
-1.404
-0.8
-1.524
-2.004
-1.158
-1.872
-0.7
-2.222
-1.934
f(x) = − 0.0519113574932318 x − 0.0833856600307693R² = 0.849981056729786
Initial poverty incidence 2007 (%)A
nnua
l cha
nge
in p
over
ty in
cide
nce
2007
-201
2 (%
)
Provincial GDP per capita remains highly unequal Poverty incidence converges
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Social Dysfunction: why inequality matters
Richard Wilkinson Emeritus Professor of Social Epidemiology
Slides borrowed from:
http://www.northeastern.edu/policyschool/wp-content/uploads/Wilkinson.ppt
TED’s TALK: “How inequality harms society” http://www.ted.com/talks/richard_wilkinson?language=en
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www.equalitytrust.org.ukWilkinson & Pickett, The Spirit Level
Neither health nor social problems are related to national income per head
Index of: • Life expectancy• Math & Literacy
• Infant mortality• Homicides• Imprisonment• Teenage births • Trust• Obesity• Mental illness
– incl. drug & alcohol addiction
• Social mobility
Ind
ex o
f h
ealt
h a
nd
so
cial
pro
ble
ms
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www.equalitytrust.org.ukWilkinson & Pickett, The Spirit Level
Child well-being is better in more equal countries
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www.equalitytrust.org.ukWilkinson & Pickett, The Spirit Level
The UNICEF Index of Child Wellbeing is not related to National Income per head
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Wilkinson & Pickett, The Spirit Level www.equalitytrust.org.uk
People in more unequal countries trust each other less
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Wilkinson & Pickett, The Spirit Level www.equalitytrust.org.uk
People in more unequal states of the USA trust each other less
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www.equalitytrust.org.ukWilkinson & Pickett, The Spirit Level
Mental illness is more common in more unequal societies
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15
Infant Mortality Rates are Higher in More Unequal Countries
Source: Wilkinson & Pickett, The Spirit Level (2009) www.equalitytrust.org.uk
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Male mortality (25-64 yrs) and income inequality in US
states and Canadian provinces.
Source: Ross NA, Wolfson MC, Dunn JR, Berthelot JM, Kaplan GA, Lynch JW. British Medical Journal 2000;320:898-902
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0
30
60
90
120
150
180
Income Inequality
Ho
mic
ide
s p
er
mill
ion
pe
op
le
Low High
Daly M, Wilson M, Vasdev S. Income inequality and homicide rates in Canada and the United States. Can J Crim 2001; 43: 219-36.
Homicide rates are higher in more unequal
US states and Canadian provinces USA states
Canadian provinces
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18
Teenage Birth Rates are Higher in More Unequal Rich Countries
Source: Wilkinson & Pickett, The Spirit Level (2009) www.equalitytrust.org.uk
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www.equalitytrust.org.ukWilkinson & Pickett, The Spirit Level
Imprisonment rates are higher in more unequal countries
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Wilkinson & Pickett, The Spirit Level www.equalitytrust.org.uk
More children drop out of High School in more unequal US states
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Educational Scores are Higher in More Equal Rich Countries
Source: Wilkinson & Pickett, The Spirit Level (2009) www.equalitytrust.org.uk
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www.equalitytrust.org.ukWilkinson & Pickett, The Spirit Level
Social mobility is lower in more unequal countries
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Wilkinson & Pickett, The Spirit Level
Index of: • Life expectancy• Math & Literacy
• Infant mortality• Homicides• Imprisonment• Teenage births • Trust• Obesity• Mental illness
– incl. drug & alcohol addiction
• Social mobility
www.equalitytrust.org.uk
Health and social problems are worse in more unequal countries
Ind
ex o
f h
ealt
h a
nd
so
cial
pro
ble
ms
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Inequality and growth
Summarized by: Jorge Alberto Charles-Coll (2013), The Debate Over the Relationship Between Income Inequality and Economic Growth: Does Iinequality Matter for Growth?
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Equity for GrowthKeadilan untuk Pertumbuhan
PERTUMBUHAN EKONOMI TINGGI
KEADILAN/ PEMERATAAN
PRAKONDISI
PEMERATAAN KESEMPATAN
PENDIDIKAN
KESEHATAN
MODAL INSANI
PEMBANGUNAN MANUSIA
INOVASI
PRODUKTIVITAS/ DAYA SAING
NEGARA
LINGKUNGAN PENDUKUNG
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