Wage dispersion and productivity: Evidence from large and medium-scale manufacturing firms in Indonesia

Crawford School of Public Policy | Arndt-Corden Department of Economics

Event details

PhD Seminar (Econ)

Date & time

Tuesday 26 March 2019
9.00am–11.00am

Venue

Crawford Seminar Room 1, JG Crawford Building 132, Lennox Crossing, ANU

Speaker

Martha Primanthi

Contacts

Associate Professor Paul Burke

Does the degree of dispersion of wages to a firm’s employees influence its productivity? This research employs survey data from Indonesia over the period 2000–2015 to explore this question. Panel estimation models reveal a non-linear relationship: a positive relationship between wage dispersion and firm productivity up to a certain level, and a negative relationship beyond that level. The findings imply that excessive wage dispersion can harm productivity. The utilised survey data-sets are from Indonesia’s Labour Force Survey and also the Large and Medium Manufacturing Industries Survey.

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