Migration, ageing, and economic development in Indonesia

Aris Ananta, Institute of Southeast Asian Studies
Evi N. Arifin, Institute of Southeast Asian Studies

Relationships among migration, ageing, and economic development have attracted researchers to this area. In this paper we examine a number of possible relationships among these three variables, using the aggregate data at the district level in Indonesia. A simultaneous equation model is employed to find out the causality of the relationships among ageing, in-migration, and development in Indonesia. Our study shows that there is one way, rather than two-way relationships among the three endogenous variables. First, higher economic development seems to have attracted in-migration, and not vice versa. Second, fertility has the most important effect on ageing process. On the other hand, we did not find that the old population structure of a district might have attracted in-migration. Third, ageing population might be a burden for economic development, when we do not include contribution from oil and gas.