THE EFFECT OF EDUCATIONAL ATTAINMENT AND WORK EXPERIENCES ON EARNINGS IN INDONESIAN MANUFACTURING SECTORS
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Date
2019-10-22Author
Shidiqi, Khalifany Ash
Pasiya, Anggun
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This study examines the impact of educational attainment and work experiences on earnings of workers from the manufacturing sector in Indonesia. For the last seven years, this sector contributes the most GDP share (approximately more than 20%) compared to other largest sectors namely agriculture, forestry, and fishery as well as wholesale and retail trades. Interestingly, manufacturing sector has the lowest number of workers compared to other mentioned sectors. Based on this comparison, manufacturing sector is likely requires workers who have a good educational background and work experiences. Moreover, workers in manufacturing sector have higher earnings compare to the other two sectors for almost all educational attainments and its rate is increasing along with the incremental of the level of education. The study estimates are based on the Mincerian wage equation with a large cross-section data of Indonesian Family Life Survey (IFLS) wave 5. The results show that educational attainment and work experiences are significantly and positively correlated with the earnings in both urban and rural area.