Earnings Gaps for Conspicuous Characteristics: Evidence from Indonesia

Ahsan, Nazmul; Kelly, Inas Rashad

doi:10.1002/soej.12298

Cited by 8 publications

(6 citation statements)

References 53 publications

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“…It is slightly higher but overlapping with the 1.4-8% gap estimated in India by Mitra and Sambamoorthi (2009). This magnitude is also on par with estimates by Ahsan and Kelly that suggest that workers in Indonesia with undesirable physical characteristics (in their study, being underweight) faced a 15.7-18.5% wage reduction (Ahsan and Kelly, 2018).…”

Section: Estimating Wage Gapssupporting

confidence: 73%

“…Wage gaps are larger when PwD take jobs that do not match with their strengths (Choe and Baldwin, 2017). Analysis of the Indonesian context by Ahsan and Kelly suggests that employers may indeed treat their employees differently based on physical characteristics: overweight men tend to receive higher wages (up to 28% more even after controlling for selection) and underweight females receive lower wages (up to 18% less after controlling for selection) (Ahsan and Kelly, 2018). Meanwhile, without controlling for characteristics, Indonesians with severe disabilities tend to have a lower average hourly wage and working hours per week than Pw/oD, but people with mild disabilities have a slightly higher hourly wage and lower working hours (ILO, 2017).…”

Section: Literature Reviewmentioning

confidence: 99%

“…A further exploration of these results follows. In the case of chronic illness, estimates of a 2-6.4% hourly wage premium may be in part due to how certain physical characteristics are perceived: Ahsan and Kelly find that overweight men and men with chronic conditions like high blood pressure or high cholesterol earn higher wages, on the order of 10.3-28.3% higher (Ahsan and Kelly, 2018…”

Section: Estimating Wage Gapsmentioning

confidence: 99%

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Disability, employment and wages: evidence from Indonesia

Caron

2020

IJM

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PurposeThe purpose of this paper is to quantify the labor market outcomes of people with disabilities (PwD) in Indonesia and compares them to people without disabilities. It first studies the labor force participation of PwD before examining the large and persistent wage gaps they face. It explores whether these wage gaps are explained by differences in productivity, a distinction which has important implications for policies addressing these gaps.Design/methodology/approachThe analysis is based on the Indonesian Family Life Survey Wave 5, which includes unique questions allowing for several definitions of disability. Multinomial logistic regression is used to study differences in type of employment for PwD. Wage gaps are estimated and corrected for selection using propensity score matching, supported by a Heckman selection model and Oaxaca–Blinder decomposition. Comparisons with other physically disadvantaged subgroups and the analysis of heterogeneity by job requirements and sector of work explore whether productivity gaps help explain wage gaps.FindingsPwD generally have lower unconditional labor force participation, but disparities largely disappear when controlling for characteristics. Moreover, patterns vary depending on whether the measure of disability used depends on prior medical diagnosis. PwD that do not require prior diagnosis tend to work in more vulnerable employment. When they are employed for wages, people with these types of disabilities face lower wages, up to 22% lower. Meanwhile, (surprisingly) those with medically diagnosed conditions face no difference or a wage premium. This paper finds compelling evidence that, where a wage penalty exists, a substantial part is unexplained by observable characteristics.Originality/valuePrevious literature on disability has been mostly based on studies of high-income economies. This paper extends the literature to Indonesia, which differs from high-income contexts due to lack of mental healthcare resources and assistive technologies, as well as weaker rule of law. It provides unique insights based on types of disability and the salient dimensions of disability in the workplace. It also provides evidence that productivity differences do not explain the wage gap.

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Section: Estimating Wage Gapssupporting

confidence: 73%

Section: Literature Reviewmentioning

confidence: 99%

Section: Estimating Wage Gapsmentioning

confidence: 99%

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Disability, employment and wages: evidence from Indonesia

Caron

2020

IJM

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“…A possible explanation for the lack of a statistically significant effect on dietary habits and BMI is the interplay between BMI and social status in developing countries. Previous studies [15] do indeed find a large wage premium associated with being overweight in Indonesia.…”

Section: Resultsmentioning

confidence: 65%

Screening, diagnosis, and long-term health outcomes in developing countries—The case of hypertension

Kim

Radoias

2018

PLoS ONE

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Hypertension is a rapidly growing problem in developing countries. At the same time, due to its asymptomatic nature, the afflicted population is largely unaware of being hypertensive. Due to a lack of resources, routine medical exams are very rare in developing countries and many sick individuals remain undiagnosed. Using a large sample of hypertensive individuals from Indonesia, we show the importance of being diagnosed. Diagnosed individuals exhibit lower systolic and diastolic blood pressure, and overall lower probability of remaining hypertensive than undiagnosed individuals. We also show the main channels through which this is achieved: taking medication, routinely monitoring one's blood pressure, and engaging in moderate physical activities. We also point to channels through which additional benefits could be realized, but that are currently ineffective: dietary changes and maintaining a healthy body weight. Combined, these results point to the importance of directing public policy towards addressing the under-diagnosis problem and educating the public of the benefits of adopting a healthy lifestyle .

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“…The findings of this paper indicate that the alternative measures of body composition are important predictors of wage premium. A plausible explanation for our findings is that people with lower BMI, suffering from under-nutrition, face wage penalty and overweight people earn wage premium [21]. Reverse causality is also plausible i.e.…”

Section: Resultsmentioning

confidence: 96%