Indonesia has been experiencing impressive economic growth and rapid urbanization in recent years. However, urbanization could affect income inequality through people's movement from rural to urban areas. Using the 2010 National Labor Force Survey (Sakernas) in Indonesia, this study examines how monthly wages are distributed between male and female workers and tests whether a wage gap exists between them. Regression results reveal that urbanization tends to benefit male workers more favorably, in terms of monthly wages, than female workers. The wage gap tends to be wider among younger workers, particularly among those who are underemployed and severely underemployed. It is also greater among public sector workers than those in the private sector. Gender wage gap in Indonesia is mainly due to gender discrimination. An act to equalize opportunity and wages among workers, especially in the public sector, is proposed.
Required Publisher's StatementThis article was first published by the Asian Development Bank (www.adb.org). The authors are highly indebted to Charles Horioka (University of the Philippines), Yoko Niimi (ADB), Sonomi Tanaka (ADB), Sakiko Tanaka (ADB), and Manami Suga (ADB) for their insightful comments. They would also like to thank the participants of the seminar hosted by the Economics and Research Department and the Gender Equity Community of Practice at ADB. All remaining errors are our own. The views expressed in this paper are those of the author and do not necessarily reflect the views and policies of the Asian Development Bank (ADB) or its Board of Governors or the governments they represent.
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