Distribution of Human Capital Between Regions in Indonesia Using the Alternative Human Development Index

Abstract

Human capital is an important factor in the development and economic growth of a country. This study aimed to (1) adopt a modified model of the Human Development Index (HDI) called the Alternative Human Development Index (AHDI) to measure human capital between regions in Indonesia, and (2) analyze the distribution pattern of human resource inequality between regions in Indonesia using cluster analysis. The results showed that the measurement of human capital with AHDI provided more comprehensive measurement results because it used a more complete dimension of human capital and showed the advantages and disadvantages of human capital between regions in Indonesia. The distribution of human capital inequality in Indonesia based on AHDI, using cluster analysis, showed that regions in Indonesia are divided into areas of high, medium, low and very low AHDI performance. The low and very low clusters are a priority for the government in the development of human capital in Indonesia.


Keywords: human capital, gender empowerment, health index, democracy index, cluster analysis

References
[1] Schultz T. Investment In Human Capital. Vol. 15, The American Economic Review. 1961. p. 1–17.

[2] Sauer P, Zagler M. (In)equality in Education and Economic Development. Rev Income Wealth. 2014;60(November):353–379.

[3] Goldin C. Human Capital-Handbook of Cliometrics. New York: Springer-Verlag Berlin Heidelberg; 2016.

[4] Tadjoeddin MZ, Suharyo WI, Mishra S. Regional disparity and vertical conflict in Indonesia. J Asia Pacific Econ. 2001;6(3):283–304.

[5] Kataoka M. Allocation of Human Capital Across Regions and Economic Growth in Indonesia. The Japan Section RSAI 50th Annual Meeting. Tokushima, Japan; (The 50th Annual Meeting of the Japan Section of the RSAI Tokushima University).

[6] Mulyaningsih T, Miranti R, Daly A, Manning C. Regional Skill Differentials: A Study of The Indonesian Labor Market. Singapore Econ Rev. 2019.

[7] Amaluddin, Payapo RW, Laitupa AA, Serang MR. A Modified Human Development Index and Poverty in the Villages of West Seram Regency, Maluku Province, Indonesia. Int J Econ Financ Issues. 2018;8(2):325–330.

[8] Taner M, Sezen B, Michi H. An alternative human development index considering unemployment. South East Eur J Econ Bus. 2011;6(1):45–60.

[9] Barro RJ, Lee J-W. A New Data Set of Educational Attainment In The World, 1950- 2010. NBER Working Paper Series 15902. Cambridge; 2010.

[10] Hanushek EA, Kimko DD. Schooling, labor-force quality, and the growth of nations. Am Econ Rev. 2000;90(5):1184–1208.

[11] Hanushek EA, Woessmann L. Do better schools lead to more growth? J Chem Inf Model. 2013;53(9):1689–1699.

[12] Affandi Y, Anugrah FD, Bary P. Human Capital and Economic Growth Across Regions: a Case Study in Indonesia. Eurasian Econ Rev. 2019;9(3):331–347. Available from: https://doi.org/10.1007/s40822-018-0114-4

[13] Climent C-A. Inequality and growth in advanced economies: An empirical investigation. J Econ Inequal. 2010;8(3):293–321.

[14] Senadza B. Non-farm Income Diversification in Rural Ghana: Patterns and Determinants. African Dev Rev. 2012;24(3):233–244.

[15] Gungor ND. Education, Human Capital Inequality and Economic Growth: Evidence From Turkey. Reg Sect Econ Stud. 2010;10.

[16] Lathapipat D, Poggi C. The Effects of the 300 Baht Minimum Wage Policy. a Bridg Mak Res Access. 2016;11.

[17] Oxley L, Le T, Gibson J. Measuring Human Capital: Alternative Methods and International Evidence. Korean Econ Rev. 2008;24(2):283–344.

[18] Cohen D, Soto M. Growth and human capital: good data, good results. J Econ Growth. 2007;12(1):51–76.

[19] Bravo G. The Human Sustainable Development Index: New Calculations and a First Critical Analysis. Ecol Indic. 2014;37:353-379. Available from: http://dx.doi.org/10.1016/j.ecolind.2013.10.020

[20] Salas-Bourgoin MA. A proposal for a modified Human Development Index. CEPAL Rev. 2014:29–44.

[21] Leiwakabessy E, Amaluddin A. A Modified Human Development Index, Democracy And Economic Growth In Indonesia. Humanit Soc Sci Rev. 2020;8(2):732–743.

[22] Bucciarelli E, Muratore F, Odoardi I, Pagliari C. Is it possible to define gender effects of the human capital on the processes of well-being?? Procedia Soc Behav Sci. 2011;15:1067–1075.

[23] Bidani B, Ravallion M. Decomposing Social Indicators Using Distributional Data. J Econom. 1997;77(1):125–139.

[24] UNDP. HUMAN DEVELOPMENT REPORT 1992. United Nations Development Programme (UNDP). New York: Oxford University Press; 1992.