Abstract

The main objective of this paper is to clarify the impact of education on income inequality in a decentralized Indonesia. This paper uses Indonesian provincial-level data from 2001 to 2018 and dynamic panel estimation techniques to deal with the estimation’s potential persistence and endogeneity problems. The result provides evidence that the higher level of fiscal decentralization, the weaker the effect of schoolyears on income inequality. Fiscal decentralization moderates the positive relationship between schoolyears and income inequality such that the relationship is weakened when the level of fiscal decentralization is higher and stronger when the level of fiscal decentralization is lower. Fiscal decentralization may enable the local government to improve its capacity to reduce the income inequality increases caused by improved educational outcomes. This paper proposes a set of policy recommendations for the government to alleviate the effect of education outcomes on income inequality using fiscal decentralization.

摘要

本文的主要目的是阐明教育对分散的印度尼西亚收入不平等的影响。本文利用2001年至2018年印度尼西亚省级数据和动态面板估计技术来处理估计的潜在持久性和内生性问题。结果证明，财政分权程度越高，学年对收入不平等的影响越弱。财政分权调节学年与收入不平等之间的正相关关系，当财政分权水平较高时，这种关系会减弱；而当财政分权水平较低时，这种关系会更强。财政分权可以使地方政府提高能力，减少因教育成果改善而导致的收入不平等加剧。本文为政府提出了一系列政策建议，以利用财政分权来减轻教育成果对收入不平等的影响。