Abstract |
During the period 1961-1976, female labor force participation rates in Indonesia increased by about 6%. This increase took place during a period when overall participation rates in Indonesia did not rise. 1 of the key questions surrounding this evidence is whether the increase in female participation rates was prompted primarily by modernization and an increase in women's relative wages, or by a decline in real incomes that may have induced women to join the labor market as added workers to supplement household incomes. In the absence of relevant data on wages and incomes, some inference is made concerning this issue from a cross-sectional analysis of the 1976 Intercensal Population Survey which consists of a sample of 60,000 households. It is found that a higher permanent household income, as represented by the level of educational attainment of the household head, does have the expected negative effect on the probability that a woman works. However, the hypothesized substitution or wage effect, which was expected to appear as a positive association between labor force participation and the woman's own level of schooling, is not supported by the data. In fact, women with higher levels of schooling are less inclined to work and, when they work, do so for fewer hours. Women who are very young and very old have relatively low participation rates, even after controlling for other factors. Not being currently married increases the probability that a woman works, as well as the number of hours she works. The presence of very young children is a clear deterrent to participation in the labor force, as is the presence of working-age males in the household. After controlling for other factors, rural women have a higher probability of working than do urban women. However, the number of hours worked is lower in rural areas than in urban ones for all regions. The results reported suggest that the "added-worker" effect is probably the more dominant one. Educated women are not necessarily induced to work more or work longer hours because of the presumed increased opportunity cost of staying at home. On the contrary, they can afford to work less. This preliminary analysis thus suggests that rising household incomes and women's level of education may yet curtail the relatively small female labor force in Indonesia. (author's). |