The Differences in Human Capital and Earnings in Indonesia dan Malaysia


  • Diah Rusminingsih STIE Jaya Negara Tamansiswa Malang, Indonesia


Human Capital, Indonesia, Malaysia, Income


This study examines the mobility of labor and capital in Indonesia and Malaysia as two neighboring
countries that have similarities in the language, culture, and beliefs of the majority population. This
study uses population-based data used in the analysis derived from various registers managed by the
central statistical agency in both Indonesia and Malaysia. By matching unique personal identification
codes across censuses and registers, the data provides detailed information about individuals, including
their education, income, labor market status, and location of residence and place of work during the
period 1992–2020. We found that the convergence of human capital intensity across functional labor
market (LMR) areas, both in Indonesia and Malaysia, is not significant. The pattern of income
disparities between regions in Indonesia and Malaysia is almost the same. Inequality in human capital
between core economic and rural areas in the functional labor market persists in Indonesia as well as in