Multidimensional poverty in Indonesia: how inclusive has economic growth been?

In this paper, we consider different approaches to assessing inclusive growth in
Indonesia since 1994. We discuss the growth incidence curve, changes in the poverty
headcount by the national monetary/consumption poverty line, and changes in inequality
indicators. We then develop a measure of inclusive growth based on multidimensional poverty
that expands the lens to include not only education, health and household assets, but also
employment. We find that the reduction of poverty measured by the national poverty line is
matched by the impressive reduction in education and health poverty, and expansion of
household assets. However, some basic problems remain in terms of school completion and
vaccination coverage, and progress on employment-related poverty in our assessment of
inclusive growth has been minimal in the last decade. We argue that the use of
multidimensional poverty to assess the inclusivity of growth draws attention to the successes
of administrations in providing public goods, and the enormous remaining challenge of
providing sufficient employment opportunities.