Technological change, skill demand, and wage inequality: Evidence from Indonesia

Jong Wha Lee; Dainn Wie

doi:10.1016/j.worlddev.2014.10.020

Technological change, skill demand, and wage inequality: Evidence from Indonesia

Jong Wha Lee, Dainn Wie

Department of Economics

Research output: Contribution to journal › Article › peer-review

49 Citations (Scopus)

Abstract

This study provides empirical evidence of the impact that technological progress has on wage inequality in Indonesia. The share of educated workers and their skill premiums have recently increased. A supply-demand analysis, using labor force survey data during 1990-2009, shows that both the between- and within-industry shifts of labor demand that favored skilled workers contributed to the widening wage inequality since the early 2000s. Evidence from firm-level data in the manufacturing sector indicates that the diffusion of foreign technologies through imports and foreign direct investment caused demand to shift toward more skilled labor and increased wage inequality.

Original language	English
Pages (from-to)	238-250
Number of pages	13
Journal	World Development
Volume	67
DOIs	https://doi.org/10.1016/j.worlddev.2014.10.020
Publication status	Published - 2015 Mar 1

Keywords

Foreign direct investment
Globalization
Indonesia
Technology
Wage inequality

ASJC Scopus subject areas

Geography, Planning and Development
Development
Sociology and Political Science
Economics and Econometrics

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1016/j.worlddev.2014.10.020

Cite this

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title = "Technological change, skill demand, and wage inequality: Evidence from Indonesia",

abstract = "This study provides empirical evidence of the impact that technological progress has on wage inequality in Indonesia. The share of educated workers and their skill premiums have recently increased. A supply-demand analysis, using labor force survey data during 1990-2009, shows that both the between- and within-industry shifts of labor demand that favored skilled workers contributed to the widening wage inequality since the early 2000s. Evidence from firm-level data in the manufacturing sector indicates that the diffusion of foreign technologies through imports and foreign direct investment caused demand to shift toward more skilled labor and increased wage inequality.",

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N2 - This study provides empirical evidence of the impact that technological progress has on wage inequality in Indonesia. The share of educated workers and their skill premiums have recently increased. A supply-demand analysis, using labor force survey data during 1990-2009, shows that both the between- and within-industry shifts of labor demand that favored skilled workers contributed to the widening wage inequality since the early 2000s. Evidence from firm-level data in the manufacturing sector indicates that the diffusion of foreign technologies through imports and foreign direct investment caused demand to shift toward more skilled labor and increased wage inequality.

AB - This study provides empirical evidence of the impact that technological progress has on wage inequality in Indonesia. The share of educated workers and their skill premiums have recently increased. A supply-demand analysis, using labor force survey data during 1990-2009, shows that both the between- and within-industry shifts of labor demand that favored skilled workers contributed to the widening wage inequality since the early 2000s. Evidence from firm-level data in the manufacturing sector indicates that the diffusion of foreign technologies through imports and foreign direct investment caused demand to shift toward more skilled labor and increased wage inequality.

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KW - Wage inequality

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JO - World Development

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ER -

Technological change, skill demand, and wage inequality: Evidence from Indonesia

Abstract

Keywords

ASJC Scopus subject areas

UN SDGs

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