IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/94930.html

Decomposition of the Gender Wage Gap in Indonesia: Analysis from Sakernas Data

Author

Listed:
  • Weni Lidya, Sukma
  • Kadir, Kadir

Abstract

This paper investigates the gender wage gap in Indonesia by analyzing data from the 2016 Indonesia-National Labor Force Survey (SAKERNAS) to quantify the gap and decompose it into explained and unexplained gaps. Without controlling for differences in characteristics, we found that women were paid approximately 30 percent less than men. The results of the decomposition show that the explained gap accounts for only approximately one-fourth of the total gap. When casual workers in agricultural and non-agricultural are excluded from the analysis, women still earned 30 percent less than men, but the portion of the explained gap increases to just more than one-third of the total gap. The gender wage gap can be diminished through increases in women’s work hours, experience, education, and skills. Moreover, the high proportion of the unexplained gap indicates the presence of unfair discrimination against women. Therefore, reducing the level of gender discrimination in the labor market is also a critical factor in narrowing the gender wage gap in Indonesia.

Suggested Citation

  • Weni Lidya, Sukma & Kadir, Kadir, 2019. "Decomposition of the Gender Wage Gap in Indonesia: Analysis from Sakernas Data," MPRA Paper 94930, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:94930
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/94930/1/MPRA_paper_94930.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. James J. Heckman, 1976. "The Common Structure of Statistical Models of Truncation, Sample Selection and Limited Dependent Variables and a Simple Estimator for Such Models," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 5, number 4, pages 475-492, National Bureau of Economic Research, Inc.
    2. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, in: Schooling, Experience, and Earnings, pages 1-4, National Bureau of Economic Research, Inc.
    3. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, January-J.
    4. Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
    5. Viktor Pirmana, 2006. "Earnings Differential Between Male-Female In Indonesia: Evidence From Sakernas Data," Working Papers in Economics and Development Studies (WoPEDS) 200608, Department of Economics, Padjadjaran University, revised Aug 2006.
    6. Amy Liu, 2004. "Sectoral gender wage gap in Vietnam," Oxford Development Studies, Taylor & Francis Journals, vol. 32(2), pages 225-239.
    7. Cotton, Jeremiah, 1988. "On the Decomposition of Wage Differentials," The Review of Economics and Statistics, MIT Press, vol. 70(2), pages 236-243, May.
    8. Reimers, Cordelia W, 1983. "Labor Market Discrimination against Hispanic and Black Men," The Review of Economics and Statistics, MIT Press, vol. 65(4), pages 570-579, November.
    9. Liu, Amy Y.C., 2004. "Gender wage gap in Vietnam: 1993 to 1998," Journal of Comparative Economics, Elsevier, vol. 32(3), pages 586-596, September.
    10. Jacob A. Mincer, 1974. "Schooling and Earnings," NBER Chapters, in: Schooling, Experience, and Earnings, pages 41-63, National Bureau of Economic Research, Inc.
    11. Shoshana Neuman & Ronald Oaxaca, 2004. "Wage Decompositions with Selectivity-Corrected Wage Equations: A Methodological Note," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 2(1), pages 3-10, April.
    12. Meng, Xin, 1998. "Male-female wage determination and gender wage discrimination in China's rural industrial sector," Labour Economics, Elsevier, vol. 5(1), pages 67-89, March.
    13. Menon, Nidhiya & Rodgers, Yana van der Meulen, 2009. "International Trade and the Gender Wage Gap: New Evidence from India's Manufacturing Sector," World Development, Elsevier, vol. 37(5), pages 965-981, May.
    14. Oaxaca, Ronald L. & Ransom, Michael R., 1994. "On discrimination and the decomposition of wage differentials," Journal of Econometrics, Elsevier, vol. 61(1), pages 5-21, March.
    15. David Neumark, 1988. "Employers' Discriminatory Behavior and the Estimation of Wage Discrimination," Journal of Human Resources, University of Wisconsin Press, vol. 23(3), pages 279-295.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhang, Li & Sharpe, Rhonda Vonshay & Li, Shi & Darity, William A., 2016. "Wage differentials between urban and rural-urban migrant workers in China," China Economic Review, Elsevier, vol. 41(C), pages 222-233.
    2. Günalp, Burak & Cilasun, Seyit Mümin & Acar, Elif Öznur, 2013. "Male-Female Labor Market Participation and the Extent of Gender-Based Wage Discrimination in Turkey," MPRA Paper 51503, University Library of Munich, Germany.
    3. Somasree Poddar & Ishita Mukhopadhyay, 2019. "Gender Wage Gap: Some Recent Evidences from India," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 17(1), pages 121-151, March.
    4. Ma, Xinxin, 2022. "Parenthood and the gender wage gap in urban China," Journal of Asian Economics, Elsevier, vol. 80(C).
    5. Günalp, Burak & Cilasun, Seyit Mümin & Acar, Elif Öznur, 2013. "Male-Female Labor Market Participation and the Extent of Gender-Based Wage Discrimination in Turkey," MPRA Paper 51503, University Library of Munich, Germany.
    6. Gomes, Magno Rogério & Souza, Solange de Cássia Inforzato de & Mantovani, Gabriela Gomes & Paiva, Vanessa Fortunato de, 2020. "Wage gap decomposition models: A methodological contribution," Brazilian Review of Econometrics, Sociedade Brasileira de Econometria - SBE, vol. 39(2), March.
    7. Gomes, Magno Rogério & Souza, Solange de Cássia Inforzato de & Mantovani, Gabriela Gomes & Paiva, Vanessa Fortunato de, 2019. "Wage gap decomposition models: A methodological contribution," Brazilian Review of Econometrics, Sociedade Brasileira de Econometria - SBE, vol. 39(2).
    8. Ben Jann, 2008. "A Stata implementation of the Blinder-Oaxaca decomposition," ETH Zurich Sociology Working Papers 5, ETH Zurich, Chair of Sociology, revised 14 May 2008.
    9. Garcia-Aracil, Adela & Winter, Carolyn, 2006. "Gender and ethnicity differentials in school attainment and labor market earnings in Ecuador," World Development, Elsevier, vol. 34(2), pages 289-307, February.
    10. Matuszewska-Janica Aleksandra, 2018. "Differences in Men’s and Women’s Wages in the Education Sector in the Baltic Sea Region States," Folia Oeconomica Stetinensia, Sciendo, vol. 18(1), pages 157-168, June.
    11. Niels-Hugo Blunch, 2018. "Just like a woman? New comparative evidence on the gender income gap across Eastern Europe and Central Asia," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 8(1), pages 1-41, December.
    12. Ravi Srivastava, 2019. "Emerging Dynamics of Labour Market Inequality in India: Migration, Informality, Segmentation and Social Discrimination," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 62(2), pages 147-171, June.
    13. Hanewald, Katja & Jia, Ruo & Liu, Zining, 2021. "Why is inequality higher among the old? Evidence from China," China Economic Review, Elsevier, vol. 66(C).
    14. Karen Mumford & Cristina Sechel, 2020. "Pay and Job Rank among Academic Economists in the UK: Is Gender Relevant?," British Journal of Industrial Relations, London School of Economics, vol. 58(1), pages 82-113, March.
    15. Golder, Stefan M., 2000. "Endowment or Discrimination? An Analysis of Immigrant-Native Earnings Differentials in Switzerland," Kiel Working Papers 967, Kiel Institute for the World Economy.
    16. Rassou R., 1993. "Statistical measurement of gender wage differentials," ILO Working Papers 992920693402676, International Labour Organization.
    17. Myounghwan Kim & Giseung Kim, 2023. "Effect of Korean trade union on wage discrimination between regular and irregular workers," Asian Economic Journal, East Asian Economic Association, vol. 37(1), pages 3-24, March.
    18. Dileni Gunewardena & Darshi Abeyrathna & Amalie Ellagala & Kamani Rajakaruna & Shobana Rajendran, 2008. "Glass Ceilings, Sticky Floors or Sticky Doors? A Quantile Regression Approach to Exploring Gender Wage Gaps in Sri Lanka," Working Papers PMMA 2008-04, PEP-PMMA.
    19. Pedro Jesús Hernandez Martinez, 1995. "Análisis empírico de la discriminación salarial de la mujer en España," Investigaciones Economicas, Fundación SEPI, vol. 19(2), pages 195-215, May.
    20. Niels-Hugo Blunch & Nabanita Datta Gupta, 2014. "Social Networks and Health Knowledge in India: Who You Know or Who You Are?," Economics Working Papers 2014-24, Department of Economics and Business Economics, Aarhus University.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:94930. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.