Lecture | Lunch Research Seminar
Middle-Class Conundrum: Its Growth and Stagnation in Indonesia
- Date
- Tuesday 18 November 2025
- Time
- Address
-
Lipsius
Cleveringaplaats 1
2311 BD Leiden - Room
- 2.24
Registration
All are welcome, however please register in advance at l-peg@hum.leidenuniv.nl to receive a copy of the paper and lunch.
Abstract
In the first part of this paper, we evaluate what happened to the Indonesian middle class during Joko Widodo’s administration. We find evidence of middle-class stagnation in the last 10 years. At the national level, the share of the middle class increased from 18 to 23 percent in the first period but returned to 18 percent in 2023. This pattern generally holds across regions, with Java-Bali and Kalimantan consistently showing a higher than national average share of the middle class. We also find that in the last 10 years, growth in manufacturing and in the telecommunication and transportation sectors is strongly positively correlated with the share of the middle class – while growth in the other-services sector, which includes the government services sector, shows a negative correlation. Moreover, the growth of local government capital spending for social security, interestingly, is negatively correlated with the change in the share of the middle class, indicating that the middle class may not be the main recipients of such social security investment. Last, an increase in the share of formal sector employment to total employment is positively associated with a higher share of the middle class, suggesting that the limited expansion of the middle class may come from a weak formal employment growth.