THE WAGE EFFECTS ON EDUCATION: AN ANALYSIS BY GENDER IN INDONESIA

Abstract

Human capital embraces the notion that individuals acquire skills and knowledge to increase their value in labour market. Experience, training, and education are three main mechanisms for acquiring human capital, with education being primary for most individuals. The estimated coefficients reveal that the effect of education on earnings is larger as education level increases. The return to university education is highest return among other level of education, while subprimary education is the lowest rate of return to education of male and female workers. Since levels of education contributes and have a positive impact on earning for male and female workers during 1989-2009, there are several reasons that can explain this evidence such as increasing in school enrolment, scarcity of skill workers, increasing number of education institution, and impose law of compulsory basic education

Keywords

• Wage effects, Gender, Indonesia

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