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The Retirement Consumption Puzzle Effect in Indonesia: Evidence from IFLS 4 and 5 Putri, Margareta Vania; Sugiyanto, Catur
Journal of Indonesian Economy and Business Vol 39 No 1 (2024): January
Publisher : Faculty of Economics and Business, Universitas Gadjah Mada

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.22146/jieb.v39i1.5033

Abstract

Introduction/Main Objectives: This study aims to see whether the retirement consumption puzzle occurs in Indonesia. The retirement consumption puzzle refers to when there is a decline in consumption in retirement which is not in line with the life-cycle hypothesis. Background Problems: Previous studies have revealed that consump­tion shifts when entering retirement due to efficient spending. This research analyzes the consumption pattern of the Indonesian elderly peculiarly in the frame of the retirement consumption puzzle. Novelty: There is a lack of studies on the effect of retirement on consumption by Indonesian retirees and prior research has focused on the impact of retirement on household expenditure. Research Methods: This study uses data from the Indonesian Family Life Survey (IFLS) wave 4 and 5 from the years 2007 and 2014. It uses panel data and the total sample is 2,556. It also uses the difference in differences (DiD) method to see whether the change in labor status toward retirement causes a decrease in consumption in households in Indonesia. Then, this study also uses the division of age categories as the robustness check. Finding/Results: The results of this study show that there is a retirement consumption puzzle in Indonesia indicated by a decrease of 19.9% in total expenditure per capita. Conclusion: The consumption decrease in retirement demons­trates that the government should consider pension funds and create social security programs to maintain the welfare of elderly people.
Evaluating Microcredit: Effects of the 5Cs of Credit Analysis and Entrepreneur Characteristics on Loan Performance among MSMEs in Yogyakarta Joenoes, Kartini Sally Hb; Sugiyanto, Catur; Sukamdi, Sukamdi; Moeljono, Djokosantoso
Asian Journal of Social and Humanities Vol. 3 No. 7 (2025): Asian Journal of Social and Humanities
Publisher : Pelopor Publikasi Akademika

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.59888/ajosh.v3i7.546

Abstract

Micro, small, and medium enterprises (MSMEs) have a significant role in the national economy, creating jobs opportunities, increasing Gross Domestic Product (GDP), and promoting credit stability during times of crisis. However, MSMEs frequently face obstacles when attempting to access financial resources. Although the Indonesia government has implemented several measures to support MSMEs, such as the credit relaxation policy, the risk of loan non-performance loan remains tangible. This study seeks to identify the dominant factors underpinning MSMEs' failure to repay their loans focusing on 5Cs of credit analysis and characteristics of individual entrepreneurs. This study finds that the principles identified in the 5Cs of credit analysis are significantly and negatively correlated with non-performing loans, while the characteristics of individual entrepreneurs is not significantly correlated. Of the 5Cs of credit analysis, capacity and collateral are identified as the most determinant factors behind non-performing loans, though this finding differs from those of several previous studies. Meanwhile this study provides important insight which will enable the banking industry and policymakers to mitigate the credit risks experienced by MSMEs and promote the future sustainability of this sector.
Analyzing the Link between Population Diversity, Population Growth, and Income: A Panel Data Study Firdaus, Irfan Aziz Al; Pradana, Cokorda Bagus Ghana Indra; Sugiyanto, Catur
Journal of Indonesian Economy and Business Vol 41 No 1 (2026): January
Publisher : Faculty of Economics and Business, Universitas Gadjah Mada

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.22146/jieb.v41i1.12790

Abstract

Introductions: Amidst shifting demographics across many countries, certain stylized facts related to fertility, population, and income have become less universally applicable as previously established empirical models of fertility were based on long-standing regularities—namely, the negative relationships between income and fertility as well as between women’s labor force participation and fertility—many of which are now being reconsidered in light of evolving demographic trends. Novelty: This research addresses a significant gap in the literature by providing a comprehensive analysis of the relationship between population diversity, population growth, and income growth, incorporating both time-varying and cross-country components. While existing studies have examined these factors individually, our study integrates them to offer a more complete understanding of their interactions. Methodology: We employ the system generalized method of moments (GMM), a dynamic panel estimation technique that helps address endogeneity and unobserved heterogeneity in panel data settings. Findings: Our findings reveal a positive correlation between population diversity and population growth, suggesting that diversity and migration contribute to population expansion through strategic interactions among ethnic groups competing for influence in society, fostering pro-birth policies. However, we also find a negative association between population diversity and income growth, indicating potential ethnic conflict and rent-seeking behavior. In highly diverse societies, rent-seeking can lead to underinvestment in public goods, while frequent ethnic conflict is linked to lower economic growth. Conclusion: This paper highlights the complex relationship between diversity, demographic trends, and economic outcomes, underscoring the need for further research on mitigating the adverse effects of diversity on income growth.