The Gender Wage Gap in Indonesia

Abstract

In Indonesia, much like most other countries, there is an earnings disparity between men and women. There are numerous demographic and other factors that influence the gender wage gap. I examine whether controlling for these factors narrows the gender wage gap and examine the largest determinants of wages. Further, I examine whether controlling for sector lessens the gender wage gap. Using ordinary least squares multiple regression, I find that men earn, on average, more than women in Indonesia and that this disparity narrows when controlling for several observable characteristics. However, my results do not support my hypothesis that controlling for sector reduces the gap in wages between men and women. My findings reveal key determinants of the gender wage gap in Indonesia and in turn, point to several policy recommendations, including supportive childcare and access to quality part-time work, that could potentially narrow the gender wage gap. My findings ultimately suggest that a portion of the gender wage gap in Indonesia remains unexplained.