Wages, Employment and Economic Shocks: Evidence from Indonesia
AbstractAfter over a quarter century of sustained economic growth, Indonesia was struck by a large and unanticipated crisis at the end of the 20th century. Real GDP declined by about 12% in 1998. Using 13 years of annual labor force data in conjunction with two waves of a household panel, the Indonesia Family Life Survey (IFLS), this paper examines the impact of the crisis on labor market outcomes. Aggregate employment has remained remarkably robust through the crisis although there has been significant switching within sectors. The drama of the crisis lies not in aggregate employment but in real hourly earnings which, in one year, collapsed by around 40% for urban workers--be they males or females, in the market sector or self-employed. Declines of the same magnitude are recorded for females in the rural sector and rural males working for a wage. In stark contrast, real hourly earnings of self-employed males in rural areas have remained essentially stable.
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Bibliographic InfoPaper provided by RAND - Labor and Population Program in its series Papers with number 00-07.
Length: 43 pages
Date of creation: 2000
Date of revision:
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Postal: RAND, Labor and Population Program, 1700 Main Street, P.O. Box 2138 Santa Monica, CA 90407-2138.
Phone: (310) 393-0411, x7359
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WAGES ; HOUSEHOLDS ; SURVEYS ; ECONOMIC POLICY ; DEVELOPING COUNTRIES ; ECONOMIC CONDITIONS;
Other versions of this item:
- Duncan Thomas & James P. Smith & Kathleen Beegle & Graciela Teruel & Elizabeth Frankenberg, 2002. "Wages, employment and economic shocks: Evidence from Indonesia," Journal of Population Economics, Springer, vol. 15(1), pages 161-193.
- James P. Smith & Duncan Thomas & Elizabeth Frankenberg & Kathleen Beegle, 2000. "Wages, Employment and Economic Shocks: Evidence from Indonesia," Working Papers 00-07, RAND Corporation Publications Department.
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
- D30 - Microeconomics - - Distribution - - - General
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
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- James Levinsohn & Steven Berry & Jed Friedman, 1999.
"Impacts of the Indonesian Economic Crisis: Price Changes and the Poor,"
NBER Working Papers
7194, National Bureau of Economic Research, Inc.
- James A. Levinsohn & Steven T. Berry & Jed Friedman, 2003. "Impacts of the Indonesian Economic Crisis.Price Changes and the Poor," NBER Chapters, in: Managing Currency Crises in Emerging Markets, pages 393-428 National Bureau of Economic Research, Inc.
- James Levinsohn & Steven Berry & Jed Friedman, 1999. "Impacts of the Indonesian Economic Crisis: Price Changes and the Poor," William Davidson Institute Working Papers Series 249, William Davidson Institute at the University of Michigan.
- Levinsphn, J. & Berry, S. & Friedman, J., 1999. "Impacts of the Indonesian Economic Crisis: Price Changes and the Poor," Working Papers 446, Research Seminar in International Economics, University of Michigan.
- Benjamin, Dwayne, 1992. "Household Composition, Labor Markets, and Labor Demand: Testing for Separation in Agricultural Household Models," Econometrica, Econometric Society, vol. 60(2), pages 287-322, March.
- Steven Radelet & Jeffrey Sachs, 1998. "The Onset of the East Asian Financial Crisis," NBER Working Papers 6680, National Bureau of Economic Research, Inc.
- Elizabeth Frankenberg & James P. Smith & Duncan Thomas, 2003.
"Economic Shocks, Wealth, and Welfare,"
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- repec:fth:michin:446 is not listed on IDEAS
- Giancarlo Corsetti & Paolo Pesenti & Nouriel Roubini, 1998. "What Caused the Asian Currency and Financial Crisis? Part II: The Policy Debate," NBER Working Papers 6834, National Bureau of Economic Research, Inc.
- Giancarlo Corsetti & Paolo Pesenti & Nouriel Roubini, 1998. "What Caused the Asian Currency and Financial Crisis? Part I: A Macroeconomic Overview," NBER Working Papers 6833, National Bureau of Economic Research, Inc.
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