Does Indonesia Have A 'Low Pay' Civil Service?
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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Volume (Year): 37 (2001)
Issue (Month): 2 ()
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References listed on IDEAS
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- 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.
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- Bahrman, J.R. & Deolalikar, A.B., 1990. "Are There Differential Returns To Schooling By Gender? The Case Of Indonesian Labor Market," Discussion Papers in Economics at the University of Washington 90-19, Department of Economics at the University of Washington.
- 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 719-738, July.
- Halvorsen, Robert & Palmquist, Raymond, 1980. "The Interpretation of Dummy Variables in Semilogarithmic Equations," American Economic Review, American Economic Association, vol. 70(3), pages 474-475, June.
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