Technological Change, Skill Demand, and Wage Inequality in Indonesia
Lee, Jong-Wha; Wie, Dainn | March 2013
Abstract
This paper examines the empirical implications of technological changes for skill
demand and wage inequality in Indonesia. According to the National Labor Force
Survey of Indonesia, the share of educated workers and wage skill premium
increased significantly over 2003–2009 for overall industry and across the region.
An analysis based on demand–supply framework suggests that demand shifts
favoring skilled workers during the period. The decomposition of labor demand
shifts shows that they were driven not only by reallocation of labor forces
between industries but also by change within industries, particularly among
formal workers, suggesting evidence of skill-biased technological changes. The
empirical evidence from the data of manufacturing firms suggest that diffusion of
new technologies through imported materials and foreign direct investment
caused greater demand for skilled labor and higher wage inequality in the
manufacturing sector.
Citation
Lee, Jong-Wha; Wie, Dainn. 2013. Technological Change, Skill Demand, and Wage Inequality in Indonesia. © Asian Development Bank. http://hdl.handle.net/11540/2328. License: CC BY 3.0 IGO.ISSN
1655-5252
Keywords
Global Development Learning Network
Globalization And Development
International Development Strategy
Policy Development
Human Capital Development
Human Development
Human Resources Development
Skills Development
Management Development
Vocational Education
Curriculum development
Educational aid
Economic development
Industrial projects
Career development
Vocational education
Industrialization
Vocational training
Technological institutes
Job searching
Labor market
Work experience programs
Business planning
Human rights and globalization
Occupational training
Technological innovation
Labor and globalization
Manpower policy
Labor policy
Rural manpower policy
Career academies
Professional education
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Citable URI
http://hdl.handle.net/11540/2328Metadata
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