Open AccessInformation and communication technology, inequality change and regional development in Indonesia
Author(s) -
Chusnul Faizah,
Kyohei Yamada,
Devanto Shasta Pratomo
Publication year - 2021
Publication title -
journal of socioeconomics and development
Language(s) - English
Resource type - Journals
ISSN - 2615-6075
DOI - 10.31328/jsed.v4i2.2669
Subject(s) - kuznets curve , information and communications technology , inequality , economics , economic inequality , variable (mathematics) , income distribution , distribution (mathematics) , demographic economics , econometrics , economic growth , public economics , mathematics , computer science , mathematical analysis , world wide web
Although the advancement of technology provides numerous opportunities to boost economic growth and development, equal distribution may not be guaranteed. Thus, this study seeks further elaboration as to whether ICT development has a role to play in the inequality in Indonesia. Using municipal level data from 2018, the study provides both linear and non-linear models to be estimated using OLS and 2SLS. Major findings include: (i) the availability of basic ICT infrastructure is strongly linked to the reduction of inequality; (ii) the actual ICT use is positively associated with inequality, albeit at a diminishing rate, revealing a non-linear relationship similar to Kuznets' curve; (iii) the ICT skill variable comprising the education level has direct correlation with ICT use instead of inequality, with an additional score on ICT skill being associated with an increase in ICT use; (iv) the relationship between ICT use and inequality differed depending on the level of economic development, with lower-income regions experiencing the inverted U-shaped relationship as in the original Kuznets curve and higher-income regions experiencing the U-shaped curve.JEL Classification: D63; I24; O10