The Well-being of The Elderly in a Diverse Country: The Case of Indonesia

Aninditya, Flora (2016). 'The Well-being of The Elderly in a Diverse Country: The Case of Indonesia' Paper presented at the annual conference of the HDCA, Tokyo 2016.

Operationalizing the Capability Approach, Capability Measurement and Index, Diversity

Indonesia is the largest archipelago in the world with more than 17,000 islands and the world’s fourth most populous country, with over 250 million people. Indonesia is also known as an ethnically and linguistically diverse country. According to Statistics Indonesia (2015), Indonesia has more than 300 ethnic groups and 700 different language and dialects. Javanese is the largest ethnic groups with 40% of the population, followed by Sundanese with 15,50%. Parallel to this diversity, the country’s economy profile is currently shifting to an emerging and diverse economy due to the economic growth, the changing pattern of the contributing sectors in the economy, and the changing demographic trends.
                Arifin and Ananta (2013) described the current three mega demographic trends in Indonesia: an ever-growing giant population, aging population, and changing pattern of population mobility. The three trends have broad health, fiscal, and society implications. Among those trends, aging population draws special attention because it has generated tremendous financial burden for society and government. the current and future older people well-being must be planned since both groups may have health, social, and society implications.
                Aging population in Indonesia has grown much older and is expected to continue to age. Currently, the share of adults age 60 and older - 4,48 percent in 1971- has been rising to 7,6 percent by 2010 and is projected by the Statistics  Indonesia to reach 10 percent by 2020. In the next decades, the currently large number of young adults will grow old and create a large share of older population in the country. From economics and demographic perspective, this –current and future- older population could yield a second demographic dividend. However, some argue that the dividend will not be realized if the they do not have enough saving and asset accumulation (Mason and Lee, 2006).  
                In 2013, there were 20 million old people in Indonesia age 60 and older. Forty six percent among them were still working, with a large share of workers in agriculture sector (60,9 percent). The remaining population worked in trade (18,2 percent), service (7,2 percent) and other sectors (6,1%) (Statistics Indonesia, 2013 in Ropik, 2015). According to WHO, the working older people can be regarded as active ageing. It means, the older people can participate in social, economic, cultural, spiritual, and civic affairs continually (WHO, 2002). On the other hand, some argue that most Indonesian elderly is working because they are poor. Adioetomo and Mujahid (2015) mentioned that the highest poverty incidence Indonesia is found among older people and is expected to increase as they get older. Instead of voluntarily working as an expression of self-actualization , they work due to insufficient saving to finance their need (Affandi, 2009). The employment issue among aging population is still debatable in Indonesia. “Is working bad for older people?”, “Do we need to encourage them to work longer?”, “Do we need to stop them to work and give them opportunity to enjoy the leisure time?”, “Do saving and asset accumulation become appropriate measures for older people well-being?” –are the important questions need to be addressed.
                The studies of the well-being of older people usually emphasize the past income and saving profiles of the elderly. Many scholars have developed models to analyze the lifetime earnings and saving (Nagatani,1972; Hendricks, 2007;  Fan, Sesadhri, and Taber, 2015). They incorporated the uncertainty concerning future human income, consumption, and the joint distribution of wealth and earnings in individual and household level, as well as the human capital investment and labor supply decision in macro level. Hendricks (2007) also highlights how the lifetime earnings will affect the retirement wealth.
                Very limited studies have analyzed the well-being of older people in interdisciplinary perspectives.  In fact, the well-being of older people may not only be determined by the saving amount or the retirement wealth they have. In the culturally and economically diverse country like Indonesia, the culture –for example- has important impact on the living arrangement or familial support for older people. Different culture may have different habit of living arrangement. Different ethnic groups may also have different value of wealth and assets. In east Indonesia, having pigs is more important than having cash. As the largest muslim population, the religion value may also play important role in determining the well-being of older people.
                It is interesting to look at the current well-being of Indonesian elderly from interdisciplinary perspectives. This study will adopt the capability approach developed by Amartya Sen and Martha Nussbaum, which focus on the conversion of goods and services into functioning (Sen, 1994). It will also consider the personal, social, and environmental conversion factors –like culture and norms in household decision-. Both quantitative and qualitative method will be employed for a more comprehensive analysis. For quantitative method, this study will use longitudinal data of Indonesian Family Life Survey. The data is collected in individual, household, and community level. The literature review of the cultural aspect will also be used for the qualitative method. 

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