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

Year 2012, Volume: 4 Issue: 1, 117 - 126, 01.06.2012

Eddy Gunawan

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

References

• Barro, Robert Joseph. and Lee, Jong Wha (2010), “A New Data Set of
• Educational Attainment In The World, 1950–2010”, NBER working paper series,
• No. 15902. Cambridge, MA.: National Bureau of Economic Research.
• Becker, Gary (1962), “Investment in Human Capital: A Theoretical Analysis”,
• The Journal of Political Economy, Vol. 30, No. 5, pp. 9-49. Behrman, Jere and Deolalikar, Anil (1991), “School Repetition, Dropouts, and The Rates of Return to schooling: The Case of Indonesia”, Oxford Bulletin of
• Economics and Statistics, Vol. 53, No. 4, pp. 467-480. Behrman, Jere and Deolalikar, Anil (1993), “Unobserved Household and Community Heterogeneity and the Labor Market Impact of Schooling: A Case
• Study for Indonesia”, Economic Development and Cultural Change, Vol. 41, No. , pp. 461-488. Behrman, Jere and Deolalikar, Anil (1995), “Are there differences returns to schooling by gender? The case of Indonesian labour markets”, Oxford Bulletin of
• Economics and Statistics, Vol. 57, No. 1, pp. 97-117. Byron, Raymon and Takahashi, Hiroshi (1989), “An Analysis of the Effect
• Earnings in the Government and Private Sectors of Urban Java”, Bulletin of Indonesian Economic Studies, Vol. 25, No. 10, pp. 105-117. Juhn, Chinhui, Murphy, Kevin and Pierce, Brooks (1993), “Wage Inequality and the Rise in the Returns to Skill”, Journal of Political Economy, Vol. 101, No. 3, pp. 410–442.
• Mincer, Jacob (1974), Schooling, Experience, and Earnings, New York: National
• Bureau of Economic Research. Psacharopoulos, George (1985), “Return to education: A further International
• Update and Implications”, Journal of Human Resources, Vol. 20, No. 4, pp. 583- Schultz, Theodore (1961), “Investment in Human Capital”, The American
• Economic Review, Vol. 51, No. 1, pp. 1-17.