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Does Indonesia have a"low-pay"civil service?

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  • Filmer, Deon
  • Lindauer, David L.

Abstract

Government officials and polcy analysts maintain that Indonesia's civil servants are poorly paid and have been for decades. This conclusion is supported by anecdotal evidence and casual empiricism. The authors systematically analyze the realtionship between government and private compensation levels using data from two large household surveys carried out by Indonesia's Central Bureau of Statistics: the 1998 Sakernas and 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 commonly is alleged and is in keeping with public/private differentials in other countries. These results prove robust to varying econometric specifications and cast doubt on low pay as an explanation for government corruption.

Suggested Citation

  • Filmer, Deon & Lindauer, David L., 2001. "Does Indonesia have a"low-pay"civil service?," Policy Research Working Paper Series 2621, The World Bank.
    • Handle: RePEc:wbk:wbrwps:2621
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    References listed on IDEAS

    as
    1. 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.
    2. 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.
    3. 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.
    4. Edward M. Graham, 2000. "Fighting the Wrong Enemy: Antiglobal Activists and Multinational Enterprises," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 91, October.
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    Cited by:

    1. Ross H McLeod, 2003. "After Soeharto: Prospects for reform and recovery in Indonesia," Departmental Working Papers 2003-10, The Australian National University, Arndt-Corden Department of Economics.
    2. 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.
    3. Ross Mcleod, 2005. "The struggle to regain effective government under democracy in Indonesia," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 41(3), pages 367-386.
    4. Lewis, Maureen & Pettersson, Gunilla, 2009. "Governance in health care delivery : raising performance," Policy Research Working Paper Series 5074, The World Bank.
    5. Gonzalez, Eduardo T. & Mendoza, Magdalena L., 2006. "Governance in Southeast Asia: Issues and Options," Philippine Journal of Development PJD 2004 Vol. XXXI No. 1-, Philippine Institute for Development Studies.
    6. Gonzalez, Eduardo T. & Mendoza, Magdalena L., 2002. "Governance in Southeast Asia: Issues and Options," Discussion Papers DP 2002-07, Philippine Institute for Development Studies.
    7. Adang Budiman & Amanda Roan & Victor Callan, 2013. "Rationalizing Ideologies, Social Identities and Corruption Among Civil Servants in Indonesia During the Suharto Era," Journal of Business Ethics, Springer, vol. 116(1), pages 139-149, August.

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