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Can minimum wages close the gender wage gap ? evidence from Indonesia

Author

Listed:
  • Hallward-Driemeier,Mary C.
  • Rijkers,Bob
  • Waxman,Andrew R.
  • Hallward-Driemeier,Mary C.
  • Rijkers,Bob
  • Waxman,Andrew R.

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.

Suggested Citation

  • Hallward-Driemeier,Mary C. & Rijkers,Bob & Waxman,Andrew R. & Hallward-Driemeier,Mary C. & Rijkers,Bob & Waxman,Andrew R., 2015. "Can minimum wages close the gender wage gap ? evidence from Indonesia," Policy Research Working Paper Series 7364, The World Bank.
    • Handle: RePEc:wbk:wbrwps:7364
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    Citations

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    Cited by:

    1. Hallward-Driemeier, Mary & Rijkers, Bob & Waxman, Andrew, 2011. "Ladies first ? firm-level evidence on the labor impacts of the East Asian crisis," Policy Research Working Paper Series 5789, The World Bank.
    2. Del Carpio, Ximena & Nguyen, Ha & Wang, Liang Choon, 2012. "Does the minimum wage affect employment ? evidence from the manufacturing sector in Indonesia," Policy Research Working Paper Series 6147, The World Bank.
    3. Mary Hallward-Driemeier & Bob Rijkers & Andrew Waxman, 2017. "Do Employers' Responses to Crises Impact Men and Women Differently? Firm-level Evidence from Indonesia," Review of Development Economics, Wiley Blackwell, vol. 21(4), pages 1018-1056, November.
    4. Nidhiya Menon & Yana van der Meulen Rodgers, 2017. "The Impact of the Minimum Wage on Male and Female Employment and Earnings in India," Asian Development Review, MIT Press, vol. 34(1), pages 28-64, March.
    5. Ximena Del Carpio & Ha Nguyen & Laura Pabon & Liang Wang, 2015. "Do minimum wages affect employment? Evidence from the manufacturing sector in Indonesia," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-30, December.

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