Measuring different dimensions of social exclusion: evidence from a growing economy and fragmented society

Sari, Virgi Agita (2018). 'Measuring different dimensions of social exclusion: Evidence from a growing economy and fragmented society' Paper presented at the annual conference of the HDCA, Buenos Aires, Argentina 2018.


This study aims to fill the gap and to extend current literature by investigating social exclusion through the lens of capability approach to answer the ultimate question of: What sort of capabilities that are important for individual inclusion? How these capabilities interact one another thus enable one to participate in their society? It aims to enhance understandings on the multidimensionality and the relational aspect of social exclusion among individuals, by taking an interesting case of Indonesia.

Indonesia is a growing economy, with a success story in transforming from a low middle-income country to a confident G-20 member within a slightly more than a decade and was able to halve poverty from 24% to 12% during 2000s (World Bank, 2014, p. 4). Nevertheless, Indonesia population is prone to social exclusion. The steady growth is often described as ‘jobless’; 65 million people have remained vulnerable to poverty. Indonesia is an archipelago country and home to a fragmented society with hundreds of ethnic groups, which often creates disparity in public service provision and inequality in different aspects, often driven by the different cultures and religion values. Meanwhile, female has less access to formal jobs compared to their male counterpart, and the country still ranks at the bottom in terms of political participation. Meanwhile, social policy and programs in Indonesia have paid less attention to address social exclusion. More rigorous and detailed analysis is necessary to unravel the necessary conditions for achieving social inclusion, by looking at its different dimensions.

By applying capability approach in defining inclusion and using a longitudinal household data of the Indonesia Family Life Survey covering almost three decades from 1993-2014, we examine the dynamics of social exclusion among adolescence in Indonesia, focusing on three dimensions – social-, economic-, and political inclusion. IFLS provides detailed information on a range of demographic and socio-economic information of individuals, households, and communities and is known for its low level of attrition.

Using the Alkire-Foster method, we begin by measuring social exclusion index to understand the extent of individual exclusion and identify which form of capability is important for social inclusion. We then extend the analysis to sub-group decomposition, examining the heterogeneous characteristics of inclusion by geographical areas (e.g. urban/rural, province, islands), majority vis-à-vis minority ethnic groups, education-levels, age-groups, and gender. To understand the underlying factors that drive different state of social exclusion, we apply multinominal logit regression and also analyze the extent of mobility in- and out- of exclusion during the period 1993-2014. As an attempt to reveal the nobility of social inclusion approach in understanding welfare in general, we also reassess the relationship between income poverty and social exclusion by running descriptive exercises comparing individuals with income poverty and that of exclusion in different aspects.

Our results unravel worrying conditions of social exclusion behind the generous growth that Indonesia has been experiencing and we argued social structure to accounts for a large share of explanation behind this. We found two-third of adult population in Indonesia suffer from social exclusion. Whilst economic exclusion is the most common form of exclusion among individuals, we found social aspect of exclusion contributes most to the overall changes of exclusion, revealing the importance of social network. We also found that social exclusion is characterized by localities and socio-economic structure, whereby it is profound among rural and less-developed regions. Nevertheless, the results unravel counterintuitive finding whereby the extent of exclusion is more severe among urban and majority of ethnic groups. Most importantly, we found ethnic- and religious- fragmentations are the main mechanism of mobility in- and out- of exclusion over time.

In sum, the study contributes to the larger literature on capability approach, social inclusion and exclusion, and its contribution toward understanding of welfare in general. It argues that social exclusion and poverty are not two sides of the same coin and social structure matters in understanding social exclusion phenomenon, regardless of their different aspects.

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