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Does Indonesia Have A 'Low Pay' Civil Service?

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Author Info
Deon Filmer, David L. Lindauer

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Abstract

Government officials and policy analysts maintain that Indonesia's civil servants are poorly paid, and have been for decades, a conclusion that is supported by anecdotal evidence and casual empiricism. In this paper, the relationship between government and private compensation levels is systematically analysed using evidence from two large household data sets, the 1998 Sakernas and the 1999 Susenas. The results suggest that government workers with a high school education or less, representing three-quarters of the civil service, earn a pay premium over their private sector counterparts. Civil servants with more than a high school education earn less than they would in the private sector but, on average, the premium is far smaller than is commonly alleged, and is in keeping with public/private differentials in other countries. The results prove robust to varying econometric specifications and cast doubt on the proposition that low pay is an explanation for government corruption.

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Publisher Info
Article provided by Taylor and Francis Journals in its journal Bulletin of Indonesian Economic Studies.

Volume (Year): 37 (2001)
Issue (Month): 2 (August)
Pages: 189-205
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Handle: RePEc:taf:bindes:v:37:y:2001:i:2:p:189-205

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. David Clark & Mayling Oey-Gardiner, 1991. "How Indonesian Lecturers have Adjusted to Civil Service Compensation," Bulletin of Indonesian Economic Studies, Taylor and Francis Journals, vol. 27(3), pages 129-141, December. [Downloadable!] (restricted)
  2. Behrman, Jere R & Deolalikar, Anil B, 1995. "Are There Differential Returns to Schooling by Gender? The Case of Indonesian Labour Markets," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 57(1), pages 97-117, February.
  3. R. P. Byron & H. Takahashi, 1989. "An Analysis of the Effect of Schooling, Experience and Sex On Earnings in the Government and Private Sectors of Urban Java," Bulletin of Indonesian Economic Studies, Taylor and Francis Journals, vol. 25(1), pages 105-117, April. [Downloadable!] (restricted)
  4. Clive Gray, 1979. "Civil Service Compensation in Indonesia," Bulletin of Indonesian Economic Studies, Taylor and Francis Journals, vol. 15(1), pages 85-113, March. [Downloadable!] (restricted)
  5. Smith, Theodore M, 1975. " Stimulating Performance in the Indonesian Bureaucracy: Gaps in the Administrator's Tool Kit," Economic Development and Cultural Change, University of Chicago Press, vol. 23(4), pages 719-38, July.
  6. Halvorsen, Robert & Palmquist, Raymond, 1980. "The Interpretation of Dummy Variables in Semilogarithmic Equations," American Economic Review, American Economic Association, vol. 70(3), pages 474-75, June. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Ross Mcleod, 2005. "The struggle to regain effective government under democracy in Indonesia," Bulletin of Indonesian Economic Studies, Taylor and Francis Journals, vol. 41(3), pages 367-386, December. [Downloadable!] (restricted)
  2. Gonzalez, Eduardo T. & Mendoza, Magdalena L., . "Governance in Southeast Asia: Issues and Options," Discussion Papers DP 2002-07, Philippine Institute for Development Studies. [Downloadable!]
  3. Ross H McLeod, 2003. "After Soeharto: Prospects for reform and recovery in Indonesia," Departmental Working Papers 2003-10, Australian National University, Economics RSPAS. [Downloadable!]
  4. Bales, Sarah & Rama, Martin, 2001. "Are public sector workers underpaid? - Appropriate comparators in a developing country," Policy Research Working Paper Series 2747, The World Bank. [Downloadable!]
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