Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/331382 
Year of Publication: 
2025
Series/Report no.: 
WIDER Working Paper No. 50/25
Version Description: 
Correction: An error in the ISBN displayed below was corrected on 19 September 2025.
Publisher: 
The United Nations University World Institute for Development Economics Research (UNU-WIDER), Helsinki
Abstract: 
This paper explores the impact of education expansion on structural transformation and income inequality in Indonesia, contextualized within the Kuznetsian framework of economic development. Using a natural policy experiment from the 1978-1979 extension of the school year, we apply a regression discontinuity design (RDD) to establish the causal relationship between increased education and labour shifts from agriculture to non-agricultural sectors. Additionally, we employ the recentred influence function (RIF) Oaxaca-Blinder decomposition and the Atkinson inequality decomposition to assess how education expansion contributes to both within-sector and between-sector income inequality. Our findings suggest that while education expansion facilitates structural transformation, it also has complex implications for inequality, particularly within modern sectors.
Subjects: 
Kuznets
structural transformation
inequality
Indonesia
JEL: 
O10
O14
D63
Persistent Identifier of the first edition: 
ISBN: 
978-92-9267-609-4
Document Type: 
Working Paper

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