Gender wage differentials and export-oriented development in Indonesia

Indonesia embarked upon its industrial development in the late 1970s. Labour intensive industries such as garments, footwear and electronics played an important part in earning export incomes for the country, which was used to finance further industrialisation of the country. Most of the female workers are employed in these industries in Indonesia which required very little skills. Female workers were paid lower wages than their male counterparts during the initial period of industrialization although the gap between the male and female wages has been reduced over time. This chapter examines the nature of gender based wage differentials in the export oriented industries in Indonesia. The gender wage gap resulted from a number of factors such as variations in productivity, job segregation, concentration of women in industries that are relatively less capital intensive, compared to the industries that are by male workers. Empirical evidence suggests that gender-based wage differentials partially contributed to the growth of export-oriented industries in Indonesia.