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Gender Discrimination in Earnings in Indonesia: A Fuller Picture

Pages 95-121 | Published online: 30 Mar 2015
 

Abstract

This article analyses data from the 2007 Indonesia Family Life Survey in order to decompose the gender gap in earnings into explained and unexplained gaps, not only at the mean but also across the entire distribution. Women earned about 30% less than men, in both paid work and self-employment. The explained gap accounts for only about a quarter of the gap in paid work but for about half of the gap in self-employment. When the decomposition is made across the earnings distribution, the total gap decreases with earnings in both paid work and self-employment, and both conditional and unconditional on characteristics. In both employment sectors, the explained gap remains similar across the distribution, and therefore the unexplained gap drives the decrease in the total gap. The unconditional decomposition across the distribution provides great insight into the dynamics that are obscured in results derived from decomposition at the mean.

Tulisan ini menganalisis data dari Survey Kehidupan Keluarga Indonesia (Indonesia Family Life Survey) tahun 2007 untuk mendekomposisi kesenjangan gender dalam pendapatan menjadi kesenjangan yang dapat diterangkan dan tidak dapat diterangkan, serta tidak hanya pada angka rerata namun juga antar keseluruhan distribusi. Wanita mendapatkan penghasilan sekitar 30% lebih rendah dibandingkan pria, baik pada kategori pekerja upahan maupun kategori wirausaha. Kesenjangan yang dapat diterangkan mengisi seperempat dari kesenjangan pendapatan pada pekerja upahan, namun mengisi sekitar setengah dari kesenjangan yang ada pada kategori wirausaha. Ketika dekomposisi dilakukan lintas distribusi pendapatan, total kesenjangan turun sejalan dengan pendapatan pada kedua kategori, pekerja upahan dan wirusaha, serta pada kedua karakteristik, bersyarat maupun tidak bersyarat. Pada kedua sektor pekerjaan, kesenjangan yang dapat diterangkan tetap sama lintas distribusi. Oleh karenanya, kesenjangan yang tidak dapat diterangkanlah yang menyebabkan penurunan pada kesenjangan total. Dekomposisi tanpa restriksi lintas distribusi memberikan pemahaman baru atas dinamika yang selama ini tidak terjelaskan oleh metode dekomposisi yang dilakukan pada angka rerata saja.

JEL classification:

I am grateful to the two anonymous referees for their helpful comments and suggestions.

Notes

1 According to the International Labour Organization's LABORSTA database, the total labour force consists of employees, employers, own-account workers, and contributing family workers. I consider own-account workers to be the self-employed and exclude contributing family workers from the total labour force. The figure is the most recent available in the database.

2 A total of 555 paid employees (9.5%) provided firm size in intervals not values. In this case, the middle point of the interval is used as the firm size—3, 12, and 60. To respondents who reported a size of over 100, a size of 130 is assigned.

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