Effects of labor share in Indonesian agriculture on income inequality

2019 Fiscal Year Final Research Report

• Project/Area Number: 17K07991
• Research Category: Grant-in-Aid for Scientific Research (C)
• Allocation Type: Multi-year Fund
• Section: 一般
• Research Field: Agricultural science in rural society and development
• Research Institution: Kobe University
• Principal Investigator: Hondai Susumu 神戸大学, 国際協力研究科, 名誉教授 (70138569)
• Co-Investigator(Kenkyū-buntansha): 中村 和敏 長崎県立大学, 地域創造学部, 准教授 (40304084)
• Project Period (FY): 2017-04-01 – 2020-03-31
• Keywords: 所得格差 / 労働分配率 / 労働市場構造 / 労働の限界生産力 / 教育の収益率 / 実質賃金率 / 学歴別賃金格差 / 雇用形態別賃金格差

Outline of Final Research Achievements

Our analyses found that although marginal products of agricultural labor are equal to agricultural wage rates in a couple of provinces, the former are lower than the latter in many other provinces in Indonesia. It implies that their economies are still the labor surplus economy in which wage rates are inflexible to downwards. We found also that the labor shares in the agricultural and non-agricultural sectors decline when average productivities of labor increase in the labor surplus economy. This declining labor share is the main factor which leads to widening income inequality.
The labor shares have been still declining in many provinces in Indonesia. However, they have been increasing already in some provinces which passed the turning point from a labor surplus to a labor shortage stage. In latter provinces, a wage gap between formal and informal employees has been declining significantly and their income inequality has been also declining.

Free Research Field

開発経済学

Academic Significance and Societal Importance of the Research Achievements

成果の重要な意義は、開発途上国における所得格差の拡大は、経済発展に伴う農業や製造業の生産構造の変化により、生産要素に対する付加価値分配が変化し、そのために発生していることを探し当てたことである。特に農業における過剰就業によって生じる労働分配率の低下が、所得格差拡大や貧困問題の根源であることを証明した。
したがって、これらの問題に対する根源的な解決策は、農業における過剰就業の解消である。具体的には労働の過剰就業から不足への転換点の到来をできるだけ速くし、実質賃金率が上昇するように経済構造を変革し、労働分配率が上昇するような生産構造へ移行させる方策が重要であることを研究成果は示唆している。