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Household Responses to the Financial Crisis in Indonesia: Longitudinal Evidence on Poverty, Resources, and Well-Being

  • 2007-2009
  • Project
Thomas, Duncan, Duke University; SurveyMETER; Yogyakarta, Indonesia, CAMBS

Study: “Household Responses to the Financial Crisis in Indonesia: Longitudinal Evidence on Poverty, Resources, and Well-Being”
PI(s): Thomas, Duncan
Co-PI(s): Frankenberg, Elizabeth
Affiliation(s): Duke University; SurveyMETER; Yogyakarta, Indonesia, CAMBS
Institutional Partner(s): PRB Center
Project Dates:
Start: October 2007
End: September 2010
Data Source(s): Panel Data Collection (Indonesia Family Life Survey)
Methods: Randomized Controlled Trial
Geographic Location(s): Indonesia

Description:
This project explores the impact of a financial crisis on the poor in Indonesia. Data show that in the first year of the crisis, poverty rose by between 50 percent and 100 percent, real wages declined by around 40 percent, and household per capita consumption fell by 15 percent. The crisis affected the poorest, the middle-income households, and households in the upper part of the income distribution in Indonesia. The financial crisis was accompanied by large changes in the absolute price level and in relative prices. The evidence on human capital investments indicates that as the crisis unfolded, several dimensions of education and health were severely affected, with the poorest and most vulnerable paying the biggest price in several important dimensions of human capital. The empirical evidence in the Indonesia Family Life Survey (IFLS) indicates that the crisis led in a dramatic decline in the standard of living.

Research Outputs:

Frankenberg, Elizabeth, Buttenheim, Alison, Sikoki, Bondan & Suriastini, Wayan. (2009). Do women increase their use of reproductive health care when it becomes more available? Evidence from Indonesia. Studies in Family Planning, 40(1), 27-38. DOI: 10.1111/j.1728-4465.2009.00184.x

Frankenberg, Elizabeth, Friedman, Jed, Ingwersen, Nicholas & Thomas, Duncan. (2013). Child Height After a Natural Disaster (Duke University, Working Paper).

Hotz, V. Joseph, Peet, Evan & Thomas, Duncan. (2011). Decision-making by households (Duke University, Working Paper).

McKelvey, Christopher, Thomas, Duncan & Frankenberg, Elizabeth. (2012). Fertility Regulation in an Economic Crisis. Economic Development and Cultural Change, 61(1), 7-38. DOI: 10.1086/666950

Rubalcava, Luis, Teruel, Graciela & Thomas, Duncan. (2009). Investments, Time Preferences, and Public Transfers Paid to Women. Economic Development and Cultural Change, 57(3), 507-538. DOI: 10.1086/596617

Thomas, Duncan & Frankenberg, Elizabeth. (2007). Household Responses to the Financial Crisis in Indonesia Longitudinal Evidence on Poverty, Resources, and Well-Being. In Ann Harrison (Ed.), Globalization and Poverty (517-560). Chicago, IL: University of Chicago Press. DOI: 10.7208/chicago/9780226318004.003.0013

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