• The Journal of Asian Finance, Economics and Business
• /
• v.7 no.10
• /
• pp.571-579
• /
• 2020

This paper examines how human capital and other economic variables, such as private investment, economic growth, government investment, inflation, and unemployment influence inequality in Indonesia's provinces. We apply panel data model with fixed effect estimation for the data of 34 provinces from the period 2013 to 2019. We develop a new index for human capital using the education index approach. The results show that human capital has a negative and significant effect on income inequality. An increase in human capital is related to an increase in knowledge and competence due to the longer average school year and expectations of the school year. Human capital has increased the possibility of a person being accepted into the job market and earning a higher income; hence, it lowers income inequality. We also find that inflation leads to a higher gap of income distribution. A further implication of this situation is that the rise in inflation causes an increase in low-income people, and as a consequence, makes their lives worse off. This paper will be beneficial for policy-makers for whom human capital, which is measured using an education index, is an important factor that significantly affects income inequality, in addition to other economic factors.

• Journal of the Korean Home Economics Association
• /
• v.41 no.5
• /
• pp.221-232
• /
• 2003

This study examined the investment in human capital of Korean urban households. Data for this study were from the 2001 Household Income and Expenditure Survey and consisted of a sample of 2,681 households. The results of Gini's concentration coefficient showed high inequality of investment in human capital. To investigate which factors influence investments in human capital, various socio-demographic variables were analysed. High investment in human capital is shown in high society indicating that they transmit the advantage of education to their descendants. The results of this study is useful for welfare professionals who work in family well-being.

• The Journal of Asian Finance, Economics and Business
• /
• v.7 no.7
• /
• pp.489-495
• /
• 2020

Income inequality is a problem that is not only faced by developing countries such as Indonesia, but also developed countries. The difference lies in the proportion of an inequality that occurs and the solution to the level of difficulty experienced. Thus, this study aims to empirically analyze the unequal distribution of population income in Java island, Indonesia, by including the human development index, open unemployment rate, foreign investment, and the degree of fiscal decentralization. The research model used in this study was multiple linear regression to analyze the panel data with a fixed-effect model approach. The results of the study showed that human development index, open unemployment rate, and the degree of fiscal decentralization had a positive and significant effect on income inequality in Java island. Meanwhile, foreign investment had a negative and insignificant effect on income inequality in Java. It is because the value of the investment is more invested in the capital-intensive sector. The government is expected to be more selective in accepting foreign investments that enter the country, especially in Java, and it should be labor-intensive investments. In addition, the government has to equalize locations for foreign investment without reducing good cooperation with these foreign investors.

• Journal of Korea Technology Innovation Society
• /
• v.12 no.3
• /
• pp.457-470
• /
• 2009

This paper applies a income mobility method to technology inequality using conditional human capital stock and shows their empirical results during the 1980 to 2000. There are several interesting empirical results coming out this analysis. Among the results, the paper turns out that world technology inequality mobility measurement is significantly higher for rapid formation of human capital stock countries than for slow formation of human capital stock countries. This paper, therefore, suggests that technology policy need to focus on improving the public education structure to recover the rate of return to human capital investment and to speed up technology development and deployment in Korea.

• KDI Journal of Economic Policy
• /
• v.34 no.2
• /
• pp.1-15
• /
• 2012

We develop an identity choice model within the context of a stereotyping-cum-signaling framework. The model allows us to explore implications of the fact that, when individuals can choose identity, then the distribution of abilities within distinct identity groups becomes endogenous. This is significant because, when identity is exogenous and if the ability distributions within groups are the same, then inequality of group reputations in equilibrium can only arise if there is a positive feedback between group reputation and individual human capital investment activities (Arrow, 1973; Coate and Loury, 1993). Here we show that when group membership is endogenous then the logic of individuals' identity choices leads there to be a positive selection of higher ability individuals into the group with a better reputation. This happens because those for whom human-capital-investment is less costly are also those who stand to gain more from joining the favored group. As a result, ability distributions within distinct groups can endogenously diverge, reinforcing incentive-feedbacks. We develop the theoretical framework that can examine the positive selection and the endogenous group formation. The model implies that inequality deriving from stereotyping of endogenously constructed social groups is at least as great as the inequality that can emerge between exogenously given groups.