How do manufacturing jobs and labour mobility affect wage inequality? Evidence from Indonesia

Crawford School of Public Policy

Event details

PhD Seminar (Econ)

Date & time

Friday 11 June 2021


Weston Theatre , Crawford School of Public Policy, No 132, Lennox Crossing, The ANU


Martha Primanthi

This paper investigates how employment and labour mobility, measured by geographical and occupational mobility, determine wage inequality in Indonesia’s manufacturing sector over 2007-2015. The findings reveal that manufacturing jobs and occupational mobility have an inverted-U shaped relationship with wage inequality. On the other hand, geographical labour mobility significantly affects wage distribution in a U-shaped pattern. These findings are robust across many dimensions: a different type of wage inequality measurement and various estimation techniques. The most critical implication of these findings is that the human capital problem could explain the issues of wage inequality and labour market restrictions.

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