| Budget Amount *help |
¥4,680,000 (Direct Cost: ¥3,600,000、Indirect Cost: ¥1,080,000)
Fiscal Year 2016: ¥1,430,000 (Direct Cost: ¥1,100,000、Indirect Cost: ¥330,000)
Fiscal Year 2015: ¥1,300,000 (Direct Cost: ¥1,000,000、Indirect Cost: ¥300,000)
Fiscal Year 2014: ¥1,950,000 (Direct Cost: ¥1,500,000、Indirect Cost: ¥450,000)
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| Outline of Final Research Achievements |
The main objective of our research is to find out why Indonesian income inequality has been still widening. To attain our objective, we analyzed firstly marginal productivity of agricultural laborers and found there was surplus labor of Lewis (1954) concept in the agricultural sector.
When there is surplus labor in an economy, the agricultural wage rate stays close to a subsistent level. As the result, the labor shares in both agricultural and non-agricultural sectors will decline as the average productivity of labor in both sectors increases. Then, these trends of labor share created a widening income inequality in Indonesia. The labor shares will move up only after Indonesian economy passes the turning point from the labor abundant to labor shortage economy. This change in labor share will improve Indonesian income equality substantially.
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