The Evolving Composition of Poverty in Middle-Income Countries: The Case of Indonesia, 1991–2007

This paper discusses the evolution of education and health poverty in middle-income countries using the case of Indonesia. The paper reviews the long-run empirical research on poverty in Indonesia published over the last decade since the Asian financial crisis. The paper then provides new, long-run estimates of the evolution of primary education and infant mortality using the Demographic and Health Survey for Indonesia for 1991, 1994, 1997, 2002/3 and 2007, in order to elicit the evolution of the composition of education and health poverty.

The intended value-added of the paper is two-fold. First, the paper has a longitudinal element: such a comparative study using repeated DHS cross-sections has not previously been undertaken in published independent scholarly studies for Indonesia with a view to analysing the evolving level and composition of education and health poverty and disparities over the period across these five datasets. Second, the paper contributes to ongoing discussions on non-income poverty trends in middle-income countries and Indonesia in particular and debates on non-income poverty disparities by spatial and social characteristics of the household head.

The study of education and health poverty in Indonesia, as a middle-income country, can provide insights into the evolution of poverty by education and health during economic development in newly middle-income countries.

The Indonesian case suggests that poverty – by the measures used in this paper – may urbanise but remains largely rural in nature, and may increasingly be concentrated in the poorest wealth quintile over time. However, at the same time poverty remains concentrated among those in households with heads with no or incomplete primary education and in households with heads not in work or self-employed in agriculture.