Structural Transformation and Poverty Eradication in East Java (A Panel Data Approach of 38 Counties)
The characteristic of structural transformation is a decrease in the share of agriculture followed by an increase in the industry share in the economy. Sometimes, the share of services to the economy increases more rapidly than the share of the industry, called immature structural transformation. This study aims to analyze the structural transformation process in East Java and its impact on poverty alleviation. Panel data for 38 districts/cities used from the Statistics Indonesia (BPS) during the 2012-2015 period. The estimation results revealed empirically that the service sector has a significant impact on reducing poverty in East Java. This research argues that East Java has experienced immature structural transformation seen from the stagnation of the industry’s share of the economy. It is supposed that the role of the industrial sector is not significant, while the service sector is better to reduce poverty.
Keywords: Structural Transformation, Poverty, East Java, Panel Data
JEL: B22, I32, L16
Aggarwal, A. (2016). Growth , Structural Transformation and Poverty Reduction : Issues and Challenges with special reference to India*. “Employment and Decent Work for Poverty Eradication, in Support of the Second UN Decade for the Eradication of Poverty (2008-2017), May 2016.
BPS. (2020). Keadaan Ketenagakerjaan Indonesia Agustus 2020. Badan Pusat Statistik, XXiI, 05 N(91),1–20.
Christiaensen, L., & Kaminski, J. (2015). Structural change, Economic Growth and Poverty Reduction – Micro-evidence from Uganda. African Development Bank Group Working Paper Series No. 229, 229.
Dartanto, T., Yuan, E. Z. W., & Sofiyandi, Y. (2017). Two Decades of Structural Transformation and Dynamics of Income Equality in Indonesia. ADB Working Paper No. 783, 783.
Kabubo-Mariara, J., & Kiriti, T. W. (2002). Structural adjustment, poverty, and economic growth : an analysis for Kenya (Issue November).
Kadir, & Rizki, A. R. (2016). Economic growth and poverty reduction : the role of the agricultural sector in rural Indonesia Economic Growth and Poverty Reduction : The Role of The Agricultural Sector in Rural Indonesia. Seventh International Conference on Agricultural Statistics, 95111, 1–9.
Kahya, M. (2012). Structural change , income distribution and poverty in ASEAN-4 countries.
Kim, K., Sumner, A., & Yusuf, A. A. (2017). How Inclusive Is Structural Change? The Case Of Indonesia. September. https://www.gpidnetwork.org/wp-content/uploads/2017/09/WP_3.pdf
Kim, K., Sumner, A., & Yusuf, A. A. (2018). Working Papers in Trade and Development Is Structural Transformation-led Economic Growth Immiserising or Inclusive ? The Case of Indonesia.
Lee, J. E. (2018). Poverty Reduction under Structural Changes. Yeoseong-gyeongjeyeongu, 15(1), 65–83.
Mcculloch, N., Weisbrod, J., & Timmer, C. P. (2007). Pathways Out of Poverty During An Economic Crisis: An empirical Assessment of Rural Indonesia.
McMillan, M., & Rodrik, D. (2011). Globalization, structural change and productivity growth. In Making Globalization Socially Sustainable. https://doi.org/10.30875/b10cb347-en
Middendorf, T. (2006). Human capital and economic growth in OECD countries. In Jahrbucher fur Nationalokonomie und Statistik (Vol. 226, Issue 6). https://doi.org/10.1515/jbnst-2006-0607
Suryahadi, A., Hadiwidjaja, G., & Sumarto, S. (2012). Economic growth and poverty reduction in Indonesia before and after the Asian financial crisis. Bulletin of Indonesian Economic Studies, 48(2). https://doi.org/10.1080/00074918.2012.694155
Suryahadi, A., Suryadarma, D., & Sumarto, S. (2006). Economic Growth and Poverty Reduction in Indonesia: The Effects of Location and Sectoral Components of Growth. In SMERU Research Institute (Issue August).
Tello, M. D. (2015). Poverty, Growth, Structural Change, and Social Inlusion Programs: A Regional Analysis of Peru. Regional and Sectoral Economic Studies, 15(2).
Timmer, B. C. P., & Akkus, S. (2008). The Structural Transformation as A Pathway Out of Poverty: Analytics, Empirics, and Politics. CGDEV Working Paper No. 150, 150.
UNIDO. (2012). Structural Change, Poverty Reduction and Industrial Policy in the BRICS. In Unido.
Copyright (c) 2021 Achmad Rifa'i
This work is licensed under a Creative Commons Attribution 4.0 International License.
JDE (Journal of Developing Economies) (p-ISSN: 2541-1012; e-ISSN: 2528-2018) is licensed under a Creative Commons Attribution 4.0 International License
- The journal allows the author to hold the copyright of the article without restrictions.
- The journal allows the author(s) to retain publishing rights without restrictions
- The legal formal aspect of journal publication accessibility refers to Creative Commons Attribution (CC BY)