Gender-Responsive Enabling Policies for Employment in Indonesia

Asep Suryahadi & Widjajanti Isdijoso SMERU Research Institute www.smeru.or.id Workshop on Education, Employment, and Entrepreneurship ADB & OECD Manila 27-28 February 2012
The views expressed in this paper are the views of the author and do not necessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board of Governors, or the governments they represent. ADB does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequence of their use. The countries listed in this paper do not imply any view on ADB's part as to sovereignty or independent status or necessarily conform to ADB's terminology.

Policy Area

Formal Institution: Biased laws/regulations Informal Institution: Social norms on care and market works Market: Differential access to labor market Household: Differential allocation of time and resources

Formal Institution: Biased laws/regulations Labor Law No. 13/2003 (1)

Key features against gender equality:

No stipulation on rights to equal payment for equal qualification

No prohibition on violence and harassment against women at work place

No explicit punishment for violation of womens rights

No legal recognition of domestic workers

No safeguarding from unintended adverse impact of labor market institutions on women (e.g. the disemployment impact of an increase in minimum wage is higher for women than men)
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Formal Institution: Biased laws/regulations Labor Law No. 13/2003 (2)

Minimum Wage Elasticity of Employment Type of Workers All workers Male Female Adult Youth Educated Low educated White collar Blue collar Full-time Part-time
Note: ** significant at 1% * significant at 5%

Elasticity -0.112** -0.065 -0.307** -0.066 -0.307** -0.017 -0.196** 1.000* -0.140 -0.086* -0.364*

t-value -3.031 -1.874 -4.642 -1.801 -3.349 -0.480 -3.787 -2.086 -0.699 -2.248 -2.560

Source: Suryahadi et al. (2003)

Formal Institution: Biased laws/regulations Labor Law No. 13/2003 (3)

Recommendations:

Explicit prohibition of both horizontal and vertical sex segregation and discrimination of work Stipulation on threshold limit values, physical work loads, and risks within female-dominated occupations Requirement for provision of information and education about womens occupational health and safety risks Establishing law on domestic workers

Formal Institution: Biased laws/regulations Labor Union Law No. 21/2000

Key features against gender equality:

No affirmative action for women women in labor unions

low representation of

Recommendations:
Supporting and facilitating womens equal access to unionization

Union-sponsored activities should take into account womens special needs, such as family-friendly schedules
Within unions, womens committees should be formed to stimulate discussion on womens specific needs

Formal Institution: Biased laws/regulations Migrant Worker Law No. 39/2004

Key features against gender equality:

Fail to protect women working in domestic works

Recommendations:

Strengthening cooperation with receiving countries in providing protection for women working in domestic works
Ratifying UN convention on the protection of the rights of migrant workers (in progress)

Formal Institution: Biased laws/regulations Income Tax Law No. 36/2008 (1)

Key features against gender equality:

Non-taxable income to husband only

Based on assumption that women are secondary earners Serious implication for female headed households (many of
them are not officially divorced from their husbands)

Recommendations:

Developing a system that provide more flexibility for husband and wife to have own tax account and decide who should have discounted tax rate (taking into account the dependents)

Formal Institution: Biased laws/regulations Income Tax Law No. 36/2008 (2)

Formal Institution: Biased laws/regulations Income Tax Law No. 36/2008 (3)

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Informal Institution: Social norms on care and market works (1)

Key features against gender equality:

Women are viewed as responsible for care work, while earning family income is the responsibility of men

Care work has low market recognition and valuation

Public education on revaluation of care work to widen the understanding of the economy to include the reproductive sector and to recognize care as a crucial social investment Developing subsidy programs for early childhood and elderly care, in particular for poor families

Recommendations:

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Informal Institution: Social norms on care and market works (2)

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Market: Differential access to labor market (1)

Key features against gender equality:

Womens participation in the labor force (51%) is far below mens (84%)

Underemployment is much more common among women (37%) than among men (22%)
A large majority of overseas migrant workers are women (74% ), most of them work as domestic helpers (90%) Ratio of unemployment rate between women and men is improving but still higher than one

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Market: Differential access to labor market (2)

Ratio of Female to Male Unemployment Rate
3.00 2001 2002 2.00 2003 2004 2005 1.00 2006 2007 2008 0.00 15-24 25-49 50+ All Ages 2009

Market: Differential access to labor market (3)

Recommendations:

Strengthening family-friendly policies such as providing support for child care, maternity and paternity leave, support for women during maternity and on return to work, facilities for nursing infants, flexible working hours, flexible leave arrangements and career-break schemes, teleworking, and home-working. Preventing irregular and unpredictable work schedules, over which the employee has little control Imposing quotas on the number of women on company boards Promoting gender equality in education
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Market: Differential access to labor market (4)

Number of Women in the Board of Directors of 10 Largest Companies (%) PT Telkom Bank BCA Bank Mandiri Bank BRI Bank BNI PT Bumi Resources Bank Danamon PT Gas Indonesia 0 out of 8 1 out of 7 1 out of 10 1 out of 10 1 out of 9 0 out of 5 3 out of 8 0 out of 6

PT Semen Gresik PT Bukit Asam

0 out of 6 0 out of 6

Market: Differential access to labor market (5)

Difference in Net Profit between Male & Female Entrepreneurs by Expenditure Level (%), 2008
15 10 5 0 -5 -10

Percentile 25

Percentile 50

Percentile 75

Percentile 90

-15
-20 -25 -30 -35

Control variables: Experience, age, education, marital status Source: Toth (2010)

Market: Differential access to labor market (6)

Source: Matsumoto (2011)

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Market: Differential access to labor market (7)

Factors Contributing to Declining Gender Wage Gap 1996-2009

Urbanization 3% Industrial Composition 7%

Residual factors 20%

Age 19%

Gender wage gap has declined by 15% between 1996 and 2009

Education 51%

Source: Matsumoto (2011)

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Household: Differential allocation of time and resources

Key features against gender equality:

Double burdens for women who do market work as they are still responsible for all or most household works

Working as unpaid family workers is more pervasive among women (32.4% ) than among men (8.1%) Providing child- and out-of-school hours care support
Development of an integrated set of work-family balance supports for families with children

Recommendations:

Investing in physical and social infrastructure to help women access labor markets
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Thank You
It is through gainful employment that woman traversed most of the distance that separated her from the male; and nothing else can guarantee her liberty in practice. (Simone de Beauvoir, 1949)

Asep suryahadi@smeru.or.id

Widjajanti anti@smeru.or.id