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Female Labor Force Participation Rate in Indonesia: An Empirical Evidence from Panel Data Approach

Author

Listed:
  • Gatot SASONGKO

    (Faculty of Economics and Business, Satya Wacana Christian University, Indonesia)

  • Bernard Edheney HURUTA

    (Faculty of Economics and Business, Satya Wacana Christian University, Indonesia Author-Name Andrian Dolfriandra HURUTA
    Faculty of Economics and Business, Satya Wacana Christian University, Indonesia)

Abstract

Economic development constantly faces various macroeconomic issues such as achieving inflation targets, creating job opportunities, increasing economic growth, solving unemployment problems, and flattening income distribution. This study aims at analyzing the impact of provincial minimum wages, economic growth, and education level on female labor force participation rate. We generated the data from Indonesia's Central Bureau of Statistics website. This study employs panel data that consists of the time-series data from 2014 to 2018 and cross-sectional data of 34 provinces in Indonesia. By using the fixed-effect econometric model, we demonstrate that the provincial minimum wage and education level have significantly positive effects on female labor force participation rate. However, economic growth has no significant effect on female labor force participation rate. These findings suggest that the Indonesian government needs to consider minimum wages, education, work age, and work experience as policy instruments to increase female labor force participation rate. This study contributes to the literature in Indonesia by using a panel data approach.

Suggested Citation

  • Gatot SASONGKO & Bernard Edheney HURUTA, 2020. "Female Labor Force Participation Rate in Indonesia: An Empirical Evidence from Panel Data Approach," Management and Economics Review, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 5(1), pages 136-146, June.
    • Handle: RePEc:rom:merase:v:5:y:2020:i:1:p:136-146
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    References listed on IDEAS

    as
    1. Niemi, Beth T & Lloyd, Cynthia B, 1981. "Female Labor Supply in the Context of Inflation," American Economic Review, American Economic Association, vol. 71(2), pages 70-75, May.
    2. Wang PeiZhi & Muhammad Ramzan, 2020. "Do corporate governance structure and capital structure matter for the performance of the firms? An empirical testing with the contemplation of outliers," PLOS ONE, Public Library of Science, vol. 15(2), pages 1-25, February.
    3. Tsani, Stella & Paroussos, Leonidas & Fragiadakis, Costas & Charalambidis, Ioannis & Capros, Pantelis, 2013. "Female labour force participation and economic growth in the South Mediterranean countries," Economics Letters, Elsevier, vol. 120(2), pages 323-328.
    4. Tam, Henry, 2011. "U-shaped female labor participation with economic development: Some panel data evidence," Economics Letters, Elsevier, vol. 110(2), pages 140-142, February.
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    Cited by:

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    2. Yu Shuangshuang & Wenzhong Zhu & Nafeesa Mughal & Sergio Ivan Vargas Aparcana & Iskandar Muda, 2023. "The impact of education and digitalization on female labour force participation in BRICS: an advanced panel data analysis," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-9, December.

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    More about this item

    Keywords

    female labor force participation rate; provincial minimum wage; economic growth; education level; panel data;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E29 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Other

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