Fiscal Decentralization and Urbanization in Indonesia

Indonesia went through a process of fiscal decentralization in 2001 involving the devolution of several policymaking and service delivery functions to the subnational tiers of government (provinces and districts). This process is likely to have affected rIndonesia, minimum wage, federalism, urbanization

Educational attainment and selection into the labour market: The determinants of employment and earnings in Indonesia

This paper uses household survey (Sakernas) data from 2004 to estimate the determinants of earnings in Indonesia, a country where non-salaried work is widespread and where earnings data are available for salaried employees only. We deal with the selection bias by estimating a full-information maximum likelihood system of equations, where earnings are observed for salaried employees, and selection into the labour market is modelled in a multinomial setting. We also deal with reverse causality between educational attainment and earnings by instrumenting years of schooling in both the multinomial selection and the earnings equations. Our identification strategy, following Duflo (2001), uses information on exposure to a large-scale school construction programme implemented in the 1970s. Duflo recognizes that schooling may affect an individual's probability of working as a salaried employee, which creates a simultaneity bias, but does not directly deal with this issue. We find that the parameters of the earnings equation estimated under multinomial selection differ from standard OLS estimates, which ignore the selection bias, and from a binomial selection procedure "à la Heckman" (1979). In particular, the estimated parameters that vary the most are those related to the variables with the strongest impact on individual selection into the different labour-market statuses. We also find that workers with higher educational attainment are most likely to find a job as salaried employees, and that non-salaried work is as an alternative to inactivity.Indonesia ; employment ; earnings ; multinomial selection

Educational attainment and selection into the labour market: The determinants of employment and earnings in Indonesia

This paper uses household survey (Sakernas) data from 2004 to estimate the determinants of earnings in Indonesia, a country where non-salaried work is widespread and where earnings data are available for salaried employees only. We deal with the selection bias by estimating a full-information maximum likelihood system of equations, where earnings are observed for salaried employees, and selection into the labour market is modelled in a multinomial setting. We also deal with reverse causality between educational attainment and earnings by instrumenting years of schooling in both the multinomial selection and the earnings equations. Our identification strategy, following Duflo (2001), uses information on exposure to a large-scale school construction programme implemented in the 1970s. Duflo recognizes that schooling may affect an individual's probability of working as a salaried employee, which creates a simultaneity bias, but does not directly deal with this issue. We find that the parameters of the earnings equation estimated under multinomial selection differ from standard OLS estimates, which ignore the selection bias, and from a binomial selection procedure "à la Heckman" (1979). In particular, the estimated parameters that vary the most are those related to the variables with the strongest impact on individual selection into the different labour-market statuses. We also find that workers with higher educational attainment are most likely to find a job as salaried employees, and that non-salaried work is as an alternative to inactivity.Cet article utilise une enquête auprès des ménages (SAKERNAS) de 2004 pour estimer les facteurs déterminants du salaire en Indonésie, un pays où le travail non salarié est généralisé et où les données de salaires sont disponibles pour les employés salariés seulement. Nous corrigeons les biais de sélection en estimant un système d'équations où les salaires sont observés pour les employés et la sélection dans le marché du travail est modélisée dans un cadre multinomial. Nous nous occupons aussi de la causalité inverse entre le niveau d'instruction et le revenu en instrumentant les années de scolarité à la fois dans la sélection multinomiale et dans l'équation de revenu. Notre stratégie d'identification, en suivant Duflo (2001), utilise des informations sur l'exposition à un vaste programme de construction scolaire mis en oeuvre dans les années 1970. Duflo reconnaît que la scolarisation peut affecter la probabilité d'un individu de travailler comme salarié, qui crée un biais de simultanéité, mais ne traite pas directement de cette question. Nous constatons que les paramètres de l'équation de revenu estimés en cas de sélection multinomiale diffèrent des estimations OLS standard qui ignorent les biais de sélection et d'une procédure de sélection binomiale à la Heckman (1979). En particulier, les paramètres estimés qui varient le plus sont ceux qui sont liés aux variables ayant la plus forte incidence sur la sélection individuelle dans le marché du travail. Nous constatons également que les travailleurs ayant un haut niveau d'éducation sont plus susceptibles de trouver un emploi en tant que salarié et que le travail non-salarié est considéré comme une alternative à l'inactivité

The potatoes of Otro: the reconstitution of an element of the Walser food heritage in NW Italy

The article analyzes the trajectory of the reconstitution of the gastronomic heritage among the Italian Walser community. It focuses on the case study of potato production in the Otro Valley, in Alagna Valsesia (VC), and explores how the process of heritagization linked to these products allowed the community to reconstitute a trait of their biocultural diversity lost during the twentieth century. In so doing, it offers details about the gastronomy of potatoes among the Walser and shows that food heritagization is not always coupled with the commodification of local heritage products, but rather can foster processes of reappropriation of a traditional gastronomy

Cellular and Transcriptional Responses of Crassostrea gigas Hemocytes Exposed in Vitro to Brevetoxin (PbTx-2)

Hemocytes mediate a series of immune reactions essential for bivalve survival in the environment, however, the impact of harmful algal species and their associated phycotoxins upon bivalve immune system is under debate. To better understand the possible toxic effects of these toxins, Crassostrea gigas hemocytes were exposed to brevetoxin (PbTx-2). Hemocyte viability, monitored through the neutral red retention and MTT reduction assays, and apoptosis (Hoechst staining) remained unchanged during 12 h of exposure to PbTx-2 in concentrations up to 1000 µg/L. Despite cell viability and apoptosis remained stable, hemocytes incubated for 4 h with 1000 µg/L of PbTx-2 revealed higher expression levels of Hsp70 (p < 0.01) and CYP356A1 (p < 0.05) transcripts and a tendency to increase FABP expression, as evaluated by Real-Time quantitative PCR. The expression of other studied genes (BPI, IL-17, GSTO, EcSOD, Prx6, SOD and GPx) remained unchanged. The results suggest that the absence of cytotoxic effects of PbTx-2 in Crassostrea gigas hemocytes, even at high concentrations, allow early defense responses to be produced by activating protective mechanisms associated to detoxification (CYP356A1 and possibly FABP) and stress (Hsp70), but not to immune or to antioxidant (BPI, IL-17, EcSOD, Prx6, GPx and SOD) related genes

Salaried Employment and Earnings in Indonesia: New evidence on the selection bias

International audienceThis article uses household survey data to estimate the determinants of earnings in Indonesia, a country where nonsalaried work is widespread and earnings data are available for salaried employees only. We deal with the selection bias by estimating a Full-Information Maximum Likelihood (FIML) system of equations, where selection into the labour market is modelled in a multinomial setting. We find that some estimated parameters of the earnings equation differ from a binomial selection procedure by Heckman (1979), in particular for those variables with the strongest impact on the selection into the different labour-market statuses. However, the estimated returns to education are unaffected, even when we deal with the endogeneity of educational attainment following Duflo (2001). Overall, our findings show that the choice of the selection rule affects the estimates of the earnings determinants in the Indonesian labour market

How does Decentralized Minimum Wage Setting affect Employment and Informality? The case of Indonesia

The Indonesian labor market is characterized by widespread and growing informality (defined as non-salaried work). To what extent can the growth in informality be attributed to a sharp increase in the real value of the minimum wage since 2001, when minimum-wage setting was decentralized to the provincial governments? To answer this and related questions we use survey data on the labor market, on household income and expenditure, and on the industrial sector to construct a district-level dataset spanning the period 1996 to 2004. The effects of changes in the minimum wage on unemployment, formal-sector employment, and the incidence of informality in urban areas are estimated by fixed effects with a seemingly unrelated regression estimator. We find that an increase in the ratio of the minimum to the mean wage is associated with a net increase in employment: a rise in informal-sector employment more than compensates for job losses in the formal sector

How Does Decentralised Minimum-Wage Setting Affect Unemployment and Informality?: The Case of Indonesia

The Indonesian labour market is characterised by widespread informality. To some extent, these outcomes can be attributed to a sharp increase in the real value of the minimum wage since 2001, when minimum-wage setting was decentralised to the provincial governments. To test this hypothesis, this paper uses survey data on the labour market (Sakernas), household income and expenditure (Susenas) and the industrial sector (Survei Industri) to construct a district-level dataset spanning the period 1996 to 2004. The effects of changes in the minimum wage on unemployment, formal-sector employment and the incidence of informality in urban areas are estimated separately by fixed effects and jointly by a seemingly unrelated regression (SUR) estimator. Our findings show that an increase in the minimum-to-mean wage ratio is associated with a net increase in employment: a rise in informal-sector employment more than compensates for job losses in the formal sector. This Working Paper relates to the 2008 OECD Economic Assessment of Indonesia (www.oecd.org/eco/surveys/indonesia). Comment la décentralisation de la fixation du salaire minimum affecte le chômage et l'informalité ? L'expérience de l'Indonésie Le marché du travail indonésien est caractérisé par une importante informalité. Dans une certaine mesure, ces résultats peuvent être attribués à une forte augmentation de la valeur réelle du salaire minimum depuis 2001, quand la fixation du salaire minimum a été décentralisée vers les provinces. Pour tester cette hypothèse, ce document utilise les données des enquêtes sur le marché du travail (Sakernas), sur les revenus et les dépenses des ménages (Susenas) et sur le secteur industriel (Survei Industri) pour construire une base de données au niveau des administrations locales pour la période entre 1996 et 2004. Les effets de l’évolution du salaire minimum sur le chômage, sur l’emploi du secteur formel et sur l’informalité urbaine sont estimés séparément par un modèle à effets fixes et conjointement par SUR. Nos résultats suggèrent qu’une augmentation du ratio salaire minimum/salaire moyen entre 1996 et 2004 est accompagnée d’une nette augmentation de l’emploi : une augmentation de l’emploi du secteur informel a plus que compensé les pertes d’emploi du secteur formel. Ce Document de travail se rapporte à l’Évaluation économique de l’OCDE de l’Indonésie, 2008 (www.oecd.org/eco/etudes/indonesie).unemployment, employment, informality, Indonesia, minimum wage, Indonésie, emploi, salaire minimum, informalité, chômage

Enhancing the Effectiveness of Social Policies in Indonesia

Indonesia has made considerable progress over the years in improving the social conditions of its population, especially among disadvantaged groups, not least by raising government spending and strengthening social protection programmes. Nevertheless, in some respects social outcomes remain sub-par in relation to regional peers. Renforcer l'efficacité des politiques sociales en Indonésie Au fil des années, l’Indonésie a réalisé des progrès considérables dans l’amélioration des conditions sociales de sa population, notamment des groupes défavorisés, surtout en augmentant les dépenses publiques et en renforçant les programmes de protection sociale. Néanmoins, les résultats restent à certains égards en deçà de ceux enregistrés par d’autres pays de niveau comparable dans la région.education, health care, social protection, Indonesia, Indonésie, protection sociale, soins de santé, éducation