2015年-世界发展银行全球_Can_Minimum_Wages_Close_the_Gender_Wage_Gap____Evidence_from_Indonesia_ADMIN_Jun-25-195233-2018_Conflict_50页_840kb

Can Minimum Wages Close the Gender Wage Gap? Evidence from Indonesia

Core Content

This policy research working paper investigates whether minimum wage increases in Indonesia can reduce the gender wage gap among production workers in the manufacturing sector between 1995 and 2006. It uses firm-level census data to analyze the heterogeneous effects of minimum wage changes on wages and employment outcomes across different levels of education and positions in the wage distribution.

Main Findings

• Minimum wage increases are associated with reductions in gender wage gaps, particularly among better-educated women.
• The impact of minimum wage changes is not uniform:
  • Educated women (those who complete junior high and high school) experienced significant wage increases both in absolute terms and relative to men with the same education.
  • Women with low educational attainment (those who did not complete primary education) did not benefit on average from minimum wage increases, and even lost ground in the upper end of the earnings distribution.
• Gender pay gaps are largest among the least educated, and minimum wage increases were least effective in reducing these gaps.
• Wage compression and lighthouse effects are observed:
  • Minimum wages are associated with largest wage increases at the lower end of the distribution, which reduces gender wage gaps.
  • They also have positive effects on higher wages, except at the very top.
• Employment impacts are limited, and no significant changes in relative employment prospects by gender were observed.
• There is some evidence of substitution across skill categories, but the magnitude is small and similar for both men and women.

Key Points

Heterogeneous Impact by Education

• Least educated women (no primary education) did not see wage increases and experienced worsening gender gaps.
• Better-educated women (junior high and high school) saw largest wage gains and reduced gender gaps.
• Uneducated men saw wage increases, which exacerbated gender wage gaps at the lower end.

Wage Compression and Lighthouse Effects

• Minimum wages compress wages at the lower end of the distribution, which helps reduce gender wage gaps.
• They also have lighthouse effects, raising wages for those not directly affected by the minimum wage floor.
• The effects are stronger at the lower end of the wage distribution, suggesting that minimum wage increases are more beneficial to lower-paid workers.

Employment Effects

• Employment impacts are limited and not significantly affected by gender.
• Small firms are more likely to experience employment adjustments in response to minimum wage increases, but these effects are small in magnitude.
• There is no evidence that minimum wage increases reduce women's employment opportunities.

Empirical Strategy

• The paper uses firm-level analogues of Mincerian wage equations to estimate the impact of minimum wages on wages and employment.
• It also employs unconditional quantile regression to assess heterogeneity across the wage distribution.
• Firm fixed effects and province dummies are used to control for unobserved heterogeneity and to identify the effect of minimum wage changes over time.

Methodology and Data

• Data Source: The Indonesian Annual Manufacturing Survey (Statistiki Industri), which includes plant-level data on wages, employment, productivity, and other firm characteristics.
• Time Period: 1995–2006.
• Focus Group: Production workers in the manufacturing sector.
• Key Variables:
  • Minimum wage (real minimum wage, $\ln MW$).
  • Education levels of workers (no primary, primary, junior high, high school, and higher education).
  • Firm characteristics (size, ownership, export status, unskilled ratio, value-added per worker).
  • Time and province dummies.

Conclusion

• Minimum wage increases in Indonesia reduce gender wage gaps, especially for better-educated women.
• The least educated women experience worsening gender gaps due to limited wage gains and higher wage compression.
• Relative employment prospects are not significantly affected by minimum wage changes.
• The paper highlights the importance of controlling for firm characteristics and educational heterogeneity when analyzing the impact of minimum wages on gender gaps.

Summary of Key Equations

• Equation (1):
  $$
  \ln \left(\bar {w} _ {i t}\right) = \boldsymbol {\beta} _ {F} \text{Females} + \boldsymbol{u}i + \varepsilon{it}
  $$

• Equation (2):
  $$
  \ln \left(\bar {w} _ {i t}\right) = \beta_{PM} \text{PrimM}{it} + \beta{JM} \text{JunM}{it} + \beta{HM} \text{HighM}{it} + \beta{NF} \text{NoPrimF}{it} + \beta{PF} \text{PrimF}{it} + \beta{JF} \text{JunF}{it} + \beta{HF} \text{HighF}{it} + u_i + \varepsilon{it}
  $$

• Equation (4):
  $$
  \ln \left(\bar {w} _ {i t}\right) = \boldsymbol{\beta}{PM} \text{PrimM}{it} + \boldsymbol{\beta}{JM} \text{JunM}{it} + \boldsymbol{\beta}{HM} \text{HighM}{it} + \beta_{MN F} \ln \overline{MW}{jt} \text{NoF}{it} + \beta_{M P F} \ln \overline{MW}{jt} \text{PrimF}{it} + \beta_{M J F} \ln \overline{MW}{jt} \text{JunF}{it} + \beta_{M H F} \ln \overline{MW}{jt} \text{HighF}{it} + \boldsymbol{\beta}X X{it} + \boldsymbol{\beta}_{P_j} P + \boldsymbol{\beta}_S S + \boldsymbol{\beta}t T + u_i + \varepsilon{it}
  $$

• Equation for Employment:
  $$
  % \text{Females}{it} = \beta{MW} \ln MW + \beta_X X_{it} + \beta_{P_j} P + \beta_S S + \beta_t T + u_i + \varepsilon_{it}
  $$

Conclusion

The study provides empirical evidence that minimum wage increases can reduce gender wage gaps, but not uniformly across all education levels. The largest benefits are seen among better-educated women, while less educated women may suffer due to wage compression and limited wage gains. The findings suggest that minimum wages can play a role in addressing gender pay gaps, but their effectiveness depends on educational background and position in the wage distribution.