The Role of the Secondary Sector in Poverty Alleviation in Indonesia

The relationship between economic growth and poverty reduction, although well established, is heterogeneous. heterogeneity stems not only from socio-economic factors but also the structure of output growth. In Indonesia, secondary sector seems to be less poverty-reducing than other sectors. This study examines impact sectoral on in with particular attention disaggregated sector, analyzes relative sensitivities reduction labor-intensive non-labor-intensive empirical analysis uses provincial panel data Indonesia for period 2003–2018 employs pooled OLS method. results show that has little effect improving condition poor Indonesia. Nevertheless, this conclusion a high potential inappropriate. Perhaps better linkage can drawn if characteristics mining-driven nonmining-driven provinces are taken into account. provinces, pales comparison services alleviating poverty. Six-sector disaggregation economy (with or without controlling distributional through labor intensity) reveals that, within subsectors significantly reduce mining construction. Mining-driven however, do display significant role intensity determining whether pro-poor suggests adopting policies lean toward discouraging businesses employing inadvisable.