The Impact of Poultry Imports Liberation on Income Inequality in Indonesia

¹ Department of Economics, Universitas Diponegoro Jl. Prof. H. Soedarto, S.H. Semarang, Jawa Tengah 50275, Indonesia
² Departement of Economics, Universitas Negeri Semarang Jl. Sekaran, Gunung Pati, Semarang, Jawa Tengah 50229, Indonesia
³ Student of Master of Economics and Development Studies, Universitas Diponegoro Jl. Imam Bardjo No.2, Semarang, Jawa Tengah 50241, Indonesia

^* Corresponding author: firmansyah@live.undip.ac.id

Abstract

Livestock is one of the sectors that has great contribution to the national economy and absorbs labor force significantly; by about 4.24 million households are looking for livelihoods in this sector. By the possibility of liberation of poultry imports, such as Brazil's success on dispute of Indonesian poultry imports in the WTO, it isestimated that the income level of the worker in the poultry sector will be disrupted. By employing the Input-Output and Social Accounting Matrices analysis, this study simulates and analyses the impact of poultry import liberation on households' income in Indonesia. The results show that the domestic consumptionsare affected by the imports due to tariff reductions and will further affect the national and sectoral domestic output. The low levels income households who work in agriculture and live in rural areas receive a greater impact of income decrease than urban households, while non-agriculture households who live in urban have a positive impact on income levels. The study also finds that the discrepancy of the income level of several class of households are widen after the liberation of poultry imports.