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Jurnal Ekonomi Malaysia

36 2002 81 – 98

Wage Differential in Indonesian Manufacturing Industries

Fakultas Ekonomi
Muhammadiyah University of Surakarta
J 1 Ahmad Yani
Pabelan Kartasura
Surakarta
Indonesia

e-mail: B-stiadji@pascaums.com

Abstract

This study try to examine validity of efficiency wage models in the labor surplus economy_ Indonesian manufacturing sector as a core in fact pay higher wages than the outside-informal sector. The rents sharing scheme found lower than that of developed countries, especially shown by smaller elasticity of wages with respect to value added, capital intensity, concentration ratio, foreign ownership, and size. Meanwhile export orientation industry have not positive impact Oil wages, and female fraction shows quadratic form. The last finding shows increasing part of wages after female workers become majority. Meanwhile, production-non production groups have different wage detenninants pattern. The different impact of size, export, and female fraction variables can be concluded as if the industry’s policy results in wage discount, it tends to be allocated by cutting  the production worker wages only. It  mean that, the wage gap of managerial or white  collar group between high and low paying industries tend to narrow.

Author’s Acknowledgement

Muhammadiyah University of Surakarta, Indonesia. I would like to thank Prof. Sukadji Ranuwihardjo, Prof. Sudarsono, and Dr. AR. Karseno, for helpful commenlS and guidance. i am also grateful to Prof J. S. Uppal (Slate Uni versity of New York) and Prof. Robert C. Rice (Monash Univer-sily).

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Ismail, (2002). Wage Differential in Indonesian Manufacturing Industries. Jurnal Ekonomi Malaysia, 36, 81–98.

@article{Setiaji2002Wage,
  title={Wage Differential in Indonesian Manufacturing Industries},
  author={Ismail, Rahmah},
  journal={Jurnal Ekonomi Malaysia},
  volume={36},
  number={},
  pages={81—98},
 

year={2002},
}

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