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3rd MeetingMacroeconomic Aspects of Intergenerational TransfersCountry Report: Indonesia
HonoluluJanuary 2006
MalikiTurro WongkarenSuahasil Nazara
Organization
Current AchievementsMethodological IssuesPreliminary ResultsNext Steps
Current Achievement
One year (1996) estimation of complete NTA (preliminary)
Eleven year (1993 – 2003) estimation of private consumption
Time series data collection
Data Availability
Private Account
Socio-economic survey data (Susenas) 1993 – 2003, and 2004 (partial)
Labor force survey data (Sakernas)
Public Account
Government Budget figures from the 1880`s, 1960, and 1969
National Account, consumption approach and value added approach, from 1960
Notes onPrivate Account
Estimation
Private Asset Allocation
No adequate data on private assets on an annual basis
Private assets data are more complete for some survey years
Alternative survey (SKIRT – Survey on Household Savings and Investments 1992, 1994, 1996, 1997)
Bequests Estimation
Socio-economic Survey ( Susenas) data from 1993 – 2003 used to calculate headship rate
Problems: wealth or assets data only for 1993, 1996, 1999, 2002
Requires new assumption to fit with the available data
Re-define household head (?) – to smooth the estimation
Adjustment to National Level
Private consumption is adjusted to match private consumption at the National Account
Earnings and self-employment earnings do not have national aggregates Indonesian National Account is only based on
consumption and value added approaches, Income approach is not available Preliminary estimation of national income from Central
Statistic Bureau (BPS) working paper is used to adjust private labor income to match national level aggregates (may be an underestimation)
IndonesiaIncome Account Estimation: Wage and Mixed Income
Components
0
50
100
150
200
250
300
350
400
450
500
Fiscal Year
Trillio
n R
upia
h n
Wages
Mixed Income
Source: Statistical Paper BPS #14: Towards National Income for Indonesia, KusmadiSaleh and Yahya Jammal (2002)
Time Series Data
At least 11 points of cross section data on private consumption
Only three-year cycle of labor income: Wage Self-employed income Un-earned income Assets
Notes Public Account Estimation
Public Health ProgramProgram Annual Budget
(Million Rupiah)
Allocation Method
1995/1996 1996/1997
Health Support and Hospital Referral
51.4 148 Major hospital utilization profile
Civil Education 43 43 Per-capita profile
Health Support 97.6 121 Supporting hospital (puskesmas) utilization profile
Disease Control and Prevention
104.6 128 Communicable disease incident profile
Nutrition Improvement Program
15.5 17.5 Survival Rate of child and reproductive age women
Subsidy and Health Support
369.5 564.1 Per-capita rural
Others 47.6 42.4 Per-capita
Age Profile of Hospitalization and Puskesmas Utilization 1996
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.450 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 68 72 76 80 84 88 92 96
In-patient Out-patient Puskesmas
.. .
Age Profile of Public Health Consumption 1996
0
5
10
15
20
25
30
350 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 68 72
Pop
ula
tion A
dju
sted,
Mill
ion R
upia
h
0
5
10
15
20
25
Per-
capit
a m
onth
ly, Thousa
nd R
up
iah
Population Adjusted Per-capita
Public Asset Allocation
Capital asset data from BPS unpublished estimation (Hananto Sigit (2002))
Assumptions: depreciation rate 3% base year 1975
Public Capital Asset EstimationIndonesia
0
1
1
2
2
3
3
4
End of Year
Tri
llio
n R
upia
h m
Hananto Sigit (2002) *
Depreciation Rate 3%***
Hananto Sigit (2002) **
Notes: * 1993 Price with 3% depreciation assumption, based year 1975 ** 1996 Price *** Direct calculation, nominal value with 3% depreciation assumption
Time Series Data
Education, health, and other public consumption Public data is available from 1960 for central
government Government Expenditure of Netherlands East
Indies from 1821 – 1940 Estimation of National Account of Netherlands
East Indies by International Institute of Social History
Decentralization started in 2000/2001
Government Expenditure in the Netherland East Indies
0
200
400
600
800
1,000
1,2001
84
8
18
53
18
58
18
63
18
68
18
73
18
78
18
83
18
88
18
93
18
98
19
03
19
08
19
13
19
18
19
23
19
28
19
33
19
38
Fl
10
00
00
0
n
Total Expenditure
Education
of w hich in the Netherlands
Source: International Institute of Social History 2005
Estimated Variables:Preliminary Results
Lifecycle Production and Consumption, Per-capita Indonesia 1996
0
50
100
150
200
250
3000 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 68 72 76 80 84 88
Th
ou
san
d R
up
iah
Private and Public Consumption
Private Consumption
Production
Lifecycle of Production and Consumption, Per-capita, Relative to age 20 - 60, Indonesia 1996, 1999, 2002
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
0 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 68 72 76 80 84 88
Relative to production and consumption of 20 – 60 age groups
199619992002
1999
0
2000
4000
6000
8000
10000
12000
1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 20020
50
100
150
200
250
300
Exchange Rate,1 USD = Unit Rupiah
Consumer Price Index
-50
0
50
100
150
200
250
300
350
400
450
1 5 9 13 17 21 25 29 33 37 41 45 49 53 57 61 65 69 73 77 81 85 89 93 97
earning 99
labor income 99
earning 96
labor income 96
Per-capita Labor Income and Earnings, Nominal Value, ThousandRupiah, Indonesia 1996 and 1999
0
50
100
150
200
250
300
1999
2002
Lifecycle Deficit Age Profile (without Public Consumption), Nominal Value, Trillion Rupiah, Indonesia,
1993, 1996, 1999, & 2002
-10
-8
-6
-4
-2
0
2
4
6
8
10
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90
2002 1999
1996 1993
Preliminary Estimates Lifecycle Deficit, Indonesia 1996, nominal value,
Billion Rupiah
0 – 19 20 - 29 30-49 50+
Lifecycle Deficit
130,362 29,958 -46,764 6,653
Consumption 142,952 91,278 110,540 56,440
Public 28,780 7,509 8,158 4,707
Private 114,172 83,769 102,382 51,732
Less: Labor Income
12,590 61,320 157,304 49,787
Reallocation
Private transfers is the main source for young age groups
Savings (as residuals) finance the deficit for elderly
Bequest are concentrates in the old age groups, from 60 age groups
-15
-10
-5
0
5
10
15
1 5 9 13 17 21 25 29 33 37 41 45 49 53 57 61 65 69
Component of Reallocation, Trillion Rupiah, Nominal Value, Indonesia, 1996
Asset Reallocation
Transfers
Saving as residuals
Lifecycle deficit
Private transfers
-6
-4
-2
0
2
4
6
8
101 4 7 10
13
16
19
22
25
28
31
34
37
40
43
46
49
52
55
58
61
64
67
70
73
76
Component of AllocationPrivate and Public Transfers, Trillion Rupiah, Nominal Value, Indonesia 1996
Private transfers
Public Transfers
Reallocations, Indonesia 1996, nominal value, Billion Rupiah
0 – 19 20 - 29 30-49 50+
Reallocations 130,362 29,958 -46,764 6,653
Asset Reallocation -84,131 -33,039 -58,365 -18,568
Public -26,071 -16,708 -143,084 -50,288
Private -58,060 -16,331 84,243 31,720
Transfers
Public 4,999 -254 -2,282 -2,468
Private 112,467 29,442 -48,810 -49,779
Intervivos 111,839 24,901 -67,568 -23,692
Bequest 628 5,541 20,758 -26,087
Next Steps ….
Fixing BequestsForecast consumption and productionPublic Estimations
Capitals Consumptions
Estimations old previous years….
Survival Rate of Household HeadIndonesia 1993 - 2002
0.9
0.92
0.94
0.96
0.98
1
25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73
Age
1993 1996 1999 2002
Individual Monthly Education Expenditure Estimation by cohort (1958 - 2000), Thousand Rupiah, Indonesia
0
2
4
6
8
10
12
14
16
18
20
Age
Sources: Indonesia Socio-economic Survey Data 1993 - 2003
Cohort 1986
Cohort 1976
Individual Monthly Education Expenditure Estimation by cohort (1958 - 2000), Thousand Rupiah, Indonesia
0
5
10
15
20
25
0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34
Age
Note: Assuming inflation rate = 10%
dotted line is estimation data
Cohort 1986
Cohort 1976
0
2
4
6
8
10
12
0 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 68 72 76 80 84 88 92 96
Per-capita Monthly Private Health Expenditures,Nominal Value, Thousand Rupiah,Indonesia 1993 - 2003
2001
2003
2000
2002
Target This Year
NTA table – with more accurate estimations of each component
Additional years..