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Review of Income and WealthVolume 63, Issue 2, June 2017, Pages 310-334

Can Minimum Wages Close the Gender Wage Gap?: Evidence From Indonesia(Article)

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  • aThe World Bank, United States
  • bCornell University, United States

Abstract

Using manufacturing plant-level census data, this paper demonstrates that minimum wage increases in Indonesia reduced gender wage gaps among production workers, with heterogeneous impacts by level of education and position of the firm in the wage distribution. Paradoxically, educated women appear to have benefitted the most, particularly in the lower half of the firm average earnings distribution. By contrast, women who did not complete primary education did not benefit on average, and even lost ground in the upper end of the earnings distribution. Minimum wage increases were thus associated with exacerbated gender pay gaps among the least educated, and reduced gender gaps among the best educated production workers. Unconditional quantile regression analysis attests to wage compression and lighthouse effects. Changes in relative employment prospects were limited. © 2015 International Association for Research in Income and Wealth

Author keywords

genderIndonesiamanufacturingminimum wageswage gaps
  • ISSN: 00346586
  • Source Type: Journal
  • Original language: English
  • DOI: 10.1111/roiw.12219
  • Document Type: Article
  • Publisher: Blackwell Publishing Ltd

  Rijkers, B.; The World Bank, United States;
© Copyright 2017 Elsevier B.V., All rights reserved.

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