This paper estimates the size of underground economic activity in Indonesia. Underground economy covers market production of goods and services, legal and illegal, which are sold or purchased illegally. Using monetary approach, this paper concludes the average size of the underground economy in Indonesia during 2001-2013 was 8.33 percent of GDP. Consequently, the average size of potential tax loss was Rp. 11,172.86 billion or about one percent of GDP.
This study aims to estimate the impact of policy responses due to the Covid-19 pandemic on intra-generational household economic mobility in Indonesia. Given the many policy interventions during the Covid-19 pandemic in 2020, this study focuses on the implementation of partial lockdowns known as PSBB policy in four districts (Bogor Regency, Bekasi Regency, Bogor City, and Bekasi City). In order to have a causal relationship, this study performs Synthetic Control Method to construct hypothetical counterfactual regions for districts that implement PSBB policy. Based on multinomial logit estimations, this study found that the implementation of PSBB adversely affects household economic mobility in rural districts but does not significantly affect household economic mobility in urban districts in the short run.
This study aims to compare the hierarchical cluster analysis method to classify the value of trading and transportation margin (MPP) into three groups, each with specific characteristics for each commodity strategy. Cophenetic correlation analysis shows that the average hierarchical cluster method is the best for classifying strategic commodity MPPs in Indonesia in 2021. Cluster 1 has moderate characteristics (MPP) for shallots, rice, and purebred chicken. At the same time, Red Chili has low MPP characteristics in this cluster. Hopefully, this study can help policymakers make strategic decisions to reduce commodites’s MPP in provinces which includes clusters 2 and 3 belonging to the high MPP so that the distribution pattern can be more efficient.
The COVID-19 pandemic and policy response caused widespread disruptions to Indonesia's economy. Besides prioritizing saving people's lives during the COVID-19 pandemic, the government's focus is also to minimize the negative economic impact of the pandemic, including allocating social assistance programs to support household well-being. This study examines the role of COVID-19 social assistance programs in protecting households from falling into poverty during the COVID-19 pandemic. Using a longitudinal dataset from SUSENAS March and September 2020, this study employs difference-in-difference estimation with a conditional logit model to estimate the impact of COVID-19 social assistance programs on household poverty status. The result shows that the COVID-19 social assistance programs positively prevent households from becoming poor during the COVID-19 pandemic.
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