The The Differences in Human Capital and Earnings in Indonesia dan Malaysia

English

Abstract

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 Malaysia.