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Indonesia is at the center of dramatic political and economic upheaval. Projections put output in 1998 at 15% below its 1997 level and inflation at 75-80% for 1997. Riots and demonstrations flared in several Indonesian cities. After leading the country for more than a quarter of a century President Suharto resigned in May of 1998. Few Indonesians have remained untouched by these and other events of the last couple of years. The drought of 1997 the price shocks associated with the collapse of the rupiah and removal of subsidies and the income shocks arising from changes in demand combine to yield an extremely complex picture of substantial change throughout the society. The effects of the crisis on welfare of the population are nuanced and heterogeneous. They vary by region across socio-economic groups and across demographic groups. If policies are to succeed at mitigating the effects of the crisis the policies must be based on solid information about who has been affected how they have been affected and how they are changing their behaviors in response to the crisis. This study seeks to provide information on those topics. The results are based on data from the Indonesia family Life Survey (IFLS) an on-going longitudinal survey of individuals households and communities in Indonesia conducted by RAND in collaboration with UCLA and Lembaga Demografi. For the purpose of understanding how the economic crisis has affected welfare we compare the responses of individuals interviewed in the second half of 1997 to responses obtained through reinterviews with those same individuals in the second half of 1998. In the 1998 follow-up we succeeded at reinterviewing over 98% of the 1934 households from which data were collected in 1997. (excerpt)
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