Abstract

Assessment of determinants of risky behaviors, such as smoking, vaping, alcohol consumption, and drug abuse, is critically important to be conducted. Nonetheless, previous studies only looked at the role of socioeconomic factors and their relationship to risky behaviors in young people, but did not consider the lifestyle. To address this issue, we utilized microdata from the Narcotics Board of Indonesia (BNN), namely the Indonesia Urban Lifestyle Community Survey 2018, to determine which characteristics, in terms of lifestyle and socioeconomic factors, are related to the conduct of smoking, vaping, alcohol consumption, and drug abuse among young adolescents in Indonesia. Using the logistic regression method, we discovered that risky behaviors are a vicious circle. Peer effect has been linked to a higher likelihood of engaging in risky behaviors as well as nightclub visits. Gender, education, and parental education were all significant socioeconomic factors for some behaviors. This result implies that the effort to alleviate the prevalence of risky behaviors must be integrated and comprehensive. read more

Abstract

Air pollution is a significant issue in emerging economies like Indonesia, with detrimental effects on human health. This study aimed to analyse the impact of air pollution on child development, using various datasets and employing an instrumental variable approach. The findings revealed that an increase of 1 μg/m3 in regional PM 2.5 concentration had a significant negative effect on child growth, reducing height-for-age and weight-for-age scores by 0.08 standard deviations. No significant impact was observed on the stunting variable. The study also found that girls were particularly susceptible to impaired child development due to air pollution. These results emphasize the need for policies targeting air pollution reduction to support healthy child development, especially in low-income households. read more

Abstract

This study examines the spatial distribution of youth unemployment rates (15–24 years old) and the impact of wages and industrial composition on these rates in Indonesian provinces. The persistently high youth unemployment rate and uneven distribution of youth labor across provinces have motivated this research. Data from 2010 to 2018, sourced from Sakernas and other BPS publications, were analyzed for 33 Indonesian provinces.  This study employed Moran’s index and spatial panel data methods.  The findings reveal a clustered spatial pattern of youth unemployment rates among provinces.  best-fitting model, identified as the Spatial Durbin Model (SDM) with random effects, indicates that increasing the minimum wage ratio significantly contributes to higher youth unemployment rates. Conversely, higher real wages lead to a slight decrease, whereas greater industrial sector absorption reduces youth unemployment. However, increased absorption in the service sector amplifies youth unemployment read more

Abstract

We use the Indonesian quarterly bank-level data from 2009Q1 to 2021Q1 to investigate the effect of monetary policy, macroprudential policy, and the interaction between both policies on bank risk-taking in Indonesia.  Several important results emerge.  Firstly, we find evidences of the existence of risk-taking channels of the monetary policy in Indonesia, and that both bank size and level of capital have a relatively significant negative impact on bank risk-taking. Secondly, macroprudential policy tightening lowers bank risk-taking.  We also find that the interaction between macroprudential policy and monetary policy tightening lowers risk-taking. read more

Abstract

This research aims to observe the relationship between female labour force participation with economic development and to test Feminization U Curve (FEMU) hypothesis in Asian countries for the period 1990-2018. FEMU model is estimated with static model Fixed Effect as conducted in the initial research and elaborated with dynamic panel model Generalized Method of Moments (GMM). Overall, the static and dynamic model confirmed the U curve relationship between female labour force participation and economic development in accordance with FEMU hypothesis, thus female labour force participation decreases when the economy undergoes structural transformation from agricultural to industrial, and it will rise as the economy goes service sector. The hypothesis is also confirmed in the country-income categorized model. The U curve is more consistent in static model compared to the dynamic one. In addition to the structural changes that has been occurring, the dynamics of female labour force participation in Asia also can be explained with the decline in fertility rate and improvement of female tertiary education. read more

Abstract

This study was conducted to analyze and measure the impact of land registration on economic growth in provinces in Indonesia. The study suggests that there is a possibility of unobserved heterogeneity that may influence the outcome variable, namely geographical conditions, which include land area in each province and the number of land areas that have not been certified. Further information regarding these two factors still needs to be sought. Using panel data from 34 provinces in Indonesia for ten years (2010-2019) and a fixed effect panel method to overcome the unobserved heterogeneity bias, this study found that a 1 percent increase of land registration increases a province’s gross domestic product per capita by a significant 0.12 percent, after controlling for other factors. These findings align with previous studies that suggest that land registration influences society’s welfare through increased access to financial credit.  read more

Abstract

This  study  aims  to  see  whether  there  is  a  decline  in  consumption  in retirement which is not in line with the life cycle hypothesis (consumption puzzle effect).  Previous studies revealed that consumption  has  shifted  when  entering retirement  due  to  efficient  spending.  This  research  analyzes  the  consumption pattern  of  the  Indonesian  elderly  peculiarly  in  the  frame  of  the  retirement consumption puzzle. Utilizing data from the Indonesian Family Life Survey (IFLS) wave 4 and 5 from 2007 and 2014, and this study constructed panel data with a total sample of 2,556 individuals. The Difference in Differences (DiD) method is used to  see  whether  the  change  in  labor  status  toward  retirement  causes  a  decrease  in household  consumption.  As  robustness,  this  study  also  uses  the  division  of  age categories. The results of this study indicate that there is a retirement consumption puzzle in Indonesia, with a decrease of 19.9% in total expenditure per capita. The consumption decrease in retirement indicates government should consider pension funds and create social security programs to maintain the welfare of the elderly. read more

Abstract

To recognize the importance of investment flows as one of the components of development, ASEAN member countries have created the ASEAN Economic Community (AEC) 2015 blueprint as guidelines for setting up a free and open investment regime in ASEAN. The enactment of AEC makes the issue of foreign direct investment (FDI) in Indonesia more attractive. However, an increase in FDI is followed by uneven absorption of FDI in various regions of Indonesia. The implementation of regional autonomy, which gives more authority to governors, allegedly influence investors’ decision to invest. This study aims to determine whether the disclosure of openness and the presidential election have an influence on FDI inflows across 30 provinces of Indonesia. This study employs panel data regression with a fixed effect model. The findings suggest that the level of openness and political variables contribute to the absorption rate of FDI inflows in the regions. read more

Abstract

This study examines the impact of digitalization on access to household credit during the National Economic Recovery Program. Data from the National Socioeconomic Survey (Survei Sosial Ekonomi Nasional/Susenas) and Village Potential Statistics (Potensi Desa/Podes) from 2019 (pre-pandemic) and 2021 (one year post-pandemic) are used in this research. Using the binomial logit model-fixed effect, this research found that digitalization has a significant impact on access to household credit, both before and during the COVID-19 pandemic. The majority of households with access to credit are headed by males living in rural areas, who are married, working, graduated from junior high school or above, and are 30-59 years old. In line with the national economic recovery program, the government can accelerate financial inclusion by increasing access to household credit to all levels of the society without gender discrimination through banking digitalization. read more

Abstract

We analyze the optimal cigarette excise tax rate based on the optimal tax theory. We find that the optimal tax is different when there is an illegal production of cigarettes. We find that, without illegal production of cigarettes, the government can achieve the first best optimum condition by fully internalizing externality. The government can optimally choose the amount of tax on legal cigarettes that is equal to the marginal cost of health care. When there is an illegal production of cigarettes, we find that the rate of cigarette excise tax is not equal to the marginal cost of health care. Therefore, the government need more policy instruments to achieve the optimal tax rate in this case. We also find that an increase in the work hours of a legal cigarette production reduces illegal cigarette productions. Policymakers can use marginal income tax policy as an incentive to reduce illegal production of cigarettes. read more