1. 3 rd Meeting Macroeconomic Aspects of Intergenerational Transfers Country Report: Indonesia Honolulu January 2006 Maliki Turro Wongkaren Suahasil Nazara

2. Organization Current Achievements Methodological Issues Preliminary Results Next Steps

3. Current Achievement One year (1996) estimation of complete NTA (preliminary) Eleven year (1993 – 2003) estimation of private consumption Time series data collection

4. Data Availability

5. Private Account Socio-economic survey data (Susenas) 1993 – 2003, and 2004 (partial) Labor force survey data (Sakernas)

6. Public Account Government Budget figures from the 1880`s, 1960, and 1969 National Account, consumption approach and value added approach, from 1960

7. Notes on Private Account Estimation

8. Private Asset Allocation No adequate data on private assets on an annual basis Private assets data are more complete for some survey years Alternative survey (SKIRT – Survey on Household Savings and Investments 1992, 1994, 1996, 1997)

9. Bequests Estimation Socio-economic Survey （ Susenas) data from 1993 – 2003 used to calculate headship rate Problems: wealth or assets data only for 1993, 1996, 1999, 2002 Requires new assumption to fit with the available data Re-define household head (?) – to smooth the estimation

10. Adjustment to National Level Private consumption is adjusted to match private consumption at the National Account Earnings and self-employment earnings do not have national aggregates  Indonesian National Account is only based on consumption and value added approaches,  Income approach is not available  Preliminary estimation of national income from Central Statistic Bureau (BPS) working paper is used to adjust private labor income to match national level aggregates (may be an underestimation)

11. Source: Statistical Paper BPS #14: Towards National Income for Indonesia, Kusmadi Saleh and Yahya Jammal (2002)

12. Time Series Data At least 11 points of cross section data on private consumption Only three-year cycle of labor income:  Wage  Self-employed income  Un-earned income  Assets

13. Notes Public Account Estimation

14. Public Health Program ProgramAnnual Budget (Million Rupiah) Allocation Method 1995/19961996/1997 Health Support and Hospital Referral 51.4148Major hospital utilization profile Civil Education 43 Per-capita profile Health Support 97.6121Supporting hospital (puskesmas) utilization profile Disease Control and Prevention 104.6128Communicable disease incident profile Nutrition Improvement Program 15.517.5Survival Rate of child and reproductive age women Subsidy and Health Support 369.5564.1Per-capita rural Others 47.642.4Per-capita

15. Age Profile of Hospitalization and Puskesmas Utilization 1996 0 0.05 0.1 0.15 0.2 0.25 0.3 0.35 0.4 0.45 048 12162024283236404448525660646872768084889296 In-patientOut-patientPuskesmas...

16. Age Profile of Public Health Consumption 1996 0 5 10 15 20 25 30 35 048 12162024283236404448525660 646872 Population Adjusted, Million Rupiah 0 5 10 15 20 25 Per-capita monthly, Thousand Rupiah Population AdjustedPer-capita

17. Public Asset Allocation Capital asset data from BPS unpublished estimation (Hananto Sigit (2002)) Assumptions:  depreciation rate 3%  base year 1975

18. Notes: * 1993 Price with 3% depreciation assumption, based year 1975 ** 1996 Price *** Direct calculation, nominal value with 3% depreciation assumption

19. Time Series Data Education, health, and other public consumption Public data is available from 1960 for central government Government Expenditure of Netherlands East Indies from 1821 – 1940 Estimation of National Account of Netherlands East Indies by International Institute of Social History Decentralization started in 2000/2001

20. Source: International Institute of Social History 2005

21. Estimated Variables: Preliminary Results

22. Thousand Rupiah Private and Public Consumption Private Consumption Production

23. Relative to production and consumption of 20 – 60 age groups 1996 1999 2002 1999

24. Exchange Rate, 1 USD = Unit Rupiah Consumer Price Index

25. Per-capita Labor Income and Earnings, Nominal Value, Thousand Rupiah, Indonesia 1996 and 1999

26. 1999 2002

28. Preliminary Estimates Lifecycle Deficit, Indonesia 1996, nominal value, Billion Rupiah 0 – 1920 - 2930-4950+ Lifecycle Deficit 130,36229,958-46,7646,653 Consumption142,95291,278110,54056,440 Public28,7807,5098,1584,707 Private114,17283,769102,38251,732 Less: Labor Income 12,59061,320157,30449,787

29. Reallocation Private transfers is the main source for young age groups Savings (as residuals) finance the deficit for elderly Bequest are concentrates in the old age groups, from 60 age groups

30. Component of Reallocation, Trillion Rupiah, Nominal Value, Indonesia, 1996 Asset Reallocation Transfers Saving as residuals Lifecycle deficit

31. Private transfers Component of Allocation Private and Public Transfers, Trillion Rupiah, Nominal Value, Indonesia 1996 Private transfers Public Transfers

32. Reallocations, Indonesia 1996, nominal value, Billion Rupiah 0 – 1920 - 2930-4950+ Reallocations130,36229,958-46,7646,653 Asset Reallocation-84,131-33,039-58,365-18,568 Public-26,071-16,708-143,084-50,288 Private-58,060-16,33184,24331,720 Transfers Public4,999-254-2,282-2,468 Private112,46729,442-48,810-49,779 Intervivos111,83924,901-67,568-23,692 Bequest6285,54120,758-26,087

33. Next Steps …. Fixing Bequests Forecast consumption and production Public Estimations  Capitals  Consumptions Estimations old previous years….

35. Sources: Indonesia Socio-economic Survey Data 1993 - 2003 Cohort 1986 Cohort 1976

36. Note: Assuming inflation rate = 10% dotted line is estimation data Cohort 1986 Cohort 1976

37. Per-capita Monthly Private Health Expenditures, Nominal Value, Thousand Rupiah, Indonesia 1993 - 2003 2001 2003 2000 2002

38. Target This Year NTA table – with more accurate estimations of each component Additional years..