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Does Indonesia Have A 'Low Pay' Civil Service?

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  • Deon Filmer
  • David Lindauer

Abstract

Government officials and policy analysts maintain that Indonesia's civil servants are poorly paid, and have been for decades, a conclusion that is supported by anecdotal evidence and casual empiricism. In this paper, the relationship between government and private compensation levels is systematically analysed using evidence from two large household data sets, the 1998 Sakernas and the 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 is commonly alleged, and is in keeping with public/private differentials in other countries. The results prove robust to varying econometric specifications and cast doubt on the proposition that low pay is an explanation for government corruption.

Suggested Citation

  • Deon Filmer & David Lindauer, 2001. "Does Indonesia Have A 'Low Pay' Civil Service?," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 37(2), pages 189-205.
    • Handle: RePEc:taf:bindes:v:37:y:2001:i:2:p:189-205
    DOI: 10.1080/00074910152390883
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    References listed on IDEAS

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    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, April.
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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. Lewis, Maureen & Pettersson, Gunilla, 2009. "Governance in health care delivery : raising performance," Policy Research Working Paper Series 5074, The World Bank.
    3. Gonzalez, Eduardo T. & Mendoza, Magdalena L., 2002. "Governance in Southeast Asia: Issues and Options," Discussion Papers DP 2002-07, Philippine Institute for Development Studies.
    4. 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.
    5. 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.
    6. repec:phd:pjdevt:pjd_2004_vol__xxxi_no__1-e is not listed on IDEAS
    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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