How Middle Class are the ‘Scooter Class’ in Indonesia?

A Household Asset Approach to Social StratificationLUKAS SCHLOGL & ANDY SUMNER

KING’S COLLEGE LONDON

1. Indonesia’s development and emerging middle class

2. An asset-based approach

3. Evolution and characteristics of the Indonesian ‘scooter

classes’

4. Implications

5. Conclusions

1. Indonesia’s recent development

Rapid economic development & poverty Constant share of relative middle

The Literature on Indonesia’s MiddleVULNERABILITY vs …

ADB (2010) finds, “as rapid economic growth has reduced poverty across Asia, the middle class has grown rapidly in size and spending power” resulting in “hugely expanded markets for consumer goods… but… much of the middle class remains extremely vulnerable to falling back into poverty”

Ansori (2009): “dependence on the state” as characteristic

… ASSERTIVENESS Van Klinken et al. (2014): “Historically this politically active group has been created by

the state – they are teachers, government clerks, police officers and their private business partners. In recent times the proportion coming from the private sector has grown”

Recurrent theme: importance of relationship with the stateParadox: pro-democracy/accountability vs flawed patronage, consumerism, etc.

Measuring the Middle Class

  Absolute Relative

Monetaryeg. USD 2 to 10 income, owning assets worth USD

5,000, etc.

eg. 5th to 9th income decile, being financially secure, etc.

Non-Monetary

eg. assets, occupation, consumption of certain goods, education, etc.

eg. status, prestige, life satisfaction, self-labelling, etc.

“Politicians court the middle class. Pundits reference it. Sociologists study it. Most people think they belong to it. But we don’t really know what it is.” (Wheary, 2005)

2. A new analytical framework Asset-based approach

Savage (1995): “disembodied and abstract social structures” Savage (2013): “appeal of developing a new, multi-dimensional way of

registering social class differentiation” Household assets can be “a better indicator of permanent income than

current consumption/income” (Birdsall 2010) – but: not sensitive to short-term changes

Building block towards a multidimensional conception of the middle

Based on 5 waves of Indonesia Demographic and Health Survey (DHS) 1994 – 2012, nationally representative household surveys

Scooter vs. Car Dadush & Ali (2012):

10.8 mil passenger cars x 4.6 avg. household size = 49.7 mil. “middle class”?

We look at mobility classes based on transportation assets: Car class: own at least one car (often own scooter as well) Scooter class: They own a scooter only Walking poor: They own neither a scooter nor a car

“When we speak of the middle class, what we are really getting at is a way of life” (Wheary, 2005)

3. Share of Mobility Assets (DHS) & Income Poverty Thresholds (Povcal)

1994 1997 2002 2007 20120%20%40%60%80%

100%120%

Walking Scooter Car$2 $1.25 $10

$1.25/day

$2/day

$10/day

Highest Educational Attainment (1994-2012 averages)

Walking Scooter Car6.3%

41.4%14.7% 3.8%

47.8%

63.9%

41.2%

4.5% 21.0%

54.8%

No education Primary Secondary Higher

Residence (1994-2012 averages)

Walking Scooter Car

31.8%49.0%

72.0%

68.2%51.0%

28.0%

Urban Rural

Main Wall Material (2012)

Walking Scooter Car3.7%13.7%

3.5%

24.5%17.6%

6.4%

53.8%76.3%

92.1%

Bamboo Wood Stem Woven Bamboo Wood Brick

Expansion of the ‘Scooter Classes’

1994 1997 2003 2007 20120

50

100

150

200

250

Total PopulationScooter only Educated Scooter

Milli

ons (

indi

vidu

als)

Expansion of the ‘Scooter Classes’1994 1997 2003 2007 2012

Total population (mills) 191.1 200.1 218.1 230.9 246.9Mean household size 4.47 4.31 4.38 4.18 4.05

Millions (individuals)Scooter 28.6 39.8 59.1 97.2 153.9

Scooter + secondary education 18.0 25.3 39.4 65.2 104.9Scooter + secondary education + brick wall

home12.5 17.8 29.9 49.1 79.2

% of households and household sizes (DHS sample)Scooter 13.5% 18.3% 25.5% 39.5% 59.0%

Mean household size 5.0 4.7 4.7 4.5 4.3Scooter + secondary education 8.2% 11.3% 16.5% 25.9% 39.0%

Mean household size 5.1 4.8 4.8 4.6 4.4Scooter + secondary education + brick wall

home5.7% 8.1% 12.6% 19.6% 29.7%

Mean household size 5.1 4.7 4.8 4.5 4.4

Under-5 Child Mortality Rates across ClassesMobility class (in 2012)

Deaths before age of 5 per 1000 live births (2007-2012)

95% Confidence Interval

Similar aggregate under-5 mortality rates(2007-2012 average)

Walking poor 50 40-60 Bangladesh, Bhutan

Scooter class 29 26-32 Middle East & North Africa, Dominican Rep.

Scooter with secondary education

32 28-36 Philippines

Combined scooter class

31 26-36 Korea

Car class 21 14-29 Latin America, Peru, Algeria

4. Implications for Measurement VEHICLES

an interesting, easy to observe indicator for capturing changing lifestyles: Expensive enough to be not universally available (unlike TV, mobile phones, etc.) but inexpensive enough to show changing consumption patterns over short time periods (unlike housing, education, health, etc.)

But: context-sensitive (density of settlements, state of the road network, availability of public transport, culture etc.)

Further reliable assets needed to build fuller, multidimensional picture How do we make the measurement of the middle future-proof

without reverting to abstract strata?

Is the Rising ‘Scooter Class‘ a Middle Class?

Traditional middle class in Western sense more likely similar to small group of urban, car-owning Indonesian households (who often have tertiary education)Dadush and Ali (2012) take car ownership data to consider a global middle class. We think with reference to Indonesia, and other MICs this doesn’t capture the new, burgeoning group, rather the long established upper middle.

Scooter Class resembles what Birdsall et al. (2013, p. 2) refer to as the “strugglers” (in Latin American context): a vulnerable group of people that lives “well above the international poverty line, but below what we would call the secure middle class”. Child mortality similar to UMICs.

Potential Political Implications Role of middle classes in political processes:

ADB: middle classes have better education, organization; they pressure governments for better services and accountability; Van Klinken et al.: middle classes are protectionist statists

Ansori: Middle classes make “maximal efforts in preserving their relationship to the state and maintaining the status quo”

Indonesia: Implications Implies questions for public policy about fuel subsidies Traditional social protection targeted towards the poor, MC has other

benefits… Expand social protection but do not allow bias/capture

5. Conclusions Emerging or asset-based “middle” a recent phenomenon, absolute

measurement

Developments in mobility classes indicative of changing purchasing power/stratification but the burgeoning group likely similar to Birdsall et al.’s “strugglers” rather than Western middle class

Need for multidimensional asset class analysis – similar to MPI. But also: Looking below the household level

Political implications – relationship with state and governed; government capture

Thank you!

@LukasSchlogl lukas.schlogl@kcl.ac.uk

@AndyPSumner

King’s International Development Institute www.kcl.ac.uk