The Effect of FDI on Indonesia’s Jobs, Wages, and Structural Transformation
Foreign direct investment (FDI) can provide important opportunities for middle-class jobs by stimulating employment growth, paying wage premiums, and helping to shift workers out of less productive sectors. This analysis exploits regional variation...
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World Bank, Washington, DC
2021
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| Online Access: | http://documents.worldbank.org/curated/en/912131629434571756/The-Effect-of-FDI-on-Indonesia-s-Jobs-Wages-and-Structural-Transformation http://hdl.handle.net/10986/36188 |
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okr-10986-361882021-08-25T05:10:34Z The Effect of FDI on Indonesia’s Jobs, Wages, and Structural Transformation Steenbergen, Victor Hebous, Sarah Wihardja, Maria Monica Pradana, Abror Tegar FOREIGN DIRECT INVESTMENT LABOR DEMAND WAGE DIFFERENTIAL STRUCTURAL CHANGE STRUCTURAL TRANSFORMATION JOBS EMPLOYMENT LABOR MARKET Foreign direct investment (FDI) can provide important opportunities for middle-class jobs by stimulating employment growth, paying wage premiums, and helping to shift workers out of less productive sectors. This analysis exploits regional variations in sales to examine the effect that multinational corporations (MNCs) in the manufacturing sector have on employment and wages in Indonesia between 2007 and 2015. Using interaction effects, it explores how these effects differ by workers’ education level, occupation, and employment status. The study finds that manufacturing MNCs raise average wages in their sector. Yet, higher-educated workers benefit more, and white-collar workers see greater benefits than blue-collar workers. Women also appear to benefit more than men, as a result of the type of labor-intensive sectors MNCs engage in. The study finds evidence that manufacturing FDI can help to accelerate structural transformation, as workers move out of lower-productivity sectors (agriculture and low-skilled services) and into higher-productivity manufacturing. 2021-08-24T13:55:16Z 2021-08-24T13:55:16Z 2020-12-15 Working Paper http://documents.worldbank.org/curated/en/912131629434571756/The-Effect-of-FDI-on-Indonesia-s-Jobs-Wages-and-Structural-Transformation http://hdl.handle.net/10986/36188 English CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Working Paper East Asia and Pacific Indonesia |
| repository_type |
Digital Repository |
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Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
FOREIGN DIRECT INVESTMENT LABOR DEMAND WAGE DIFFERENTIAL STRUCTURAL CHANGE STRUCTURAL TRANSFORMATION JOBS EMPLOYMENT LABOR MARKET |
| spellingShingle |
FOREIGN DIRECT INVESTMENT LABOR DEMAND WAGE DIFFERENTIAL STRUCTURAL CHANGE STRUCTURAL TRANSFORMATION JOBS EMPLOYMENT LABOR MARKET Steenbergen, Victor Hebous, Sarah Wihardja, Maria Monica Pradana, Abror Tegar The Effect of FDI on Indonesia’s Jobs, Wages, and Structural Transformation |
| geographic_facet |
East Asia and Pacific Indonesia |
| description |
Foreign direct investment (FDI) can
provide important opportunities for middle-class jobs by
stimulating employment growth, paying wage premiums, and
helping to shift workers out of less productive sectors.
This analysis exploits regional variations in sales to
examine the effect that multinational corporations (MNCs) in
the manufacturing sector have on employment and wages in
Indonesia between 2007 and 2015. Using interaction effects,
it explores how these effects differ by workers’ education
level, occupation, and employment status. The study finds
that manufacturing MNCs raise average wages in their sector.
Yet, higher-educated workers benefit more, and white-collar
workers see greater benefits than blue-collar workers. Women
also appear to benefit more than men, as a result of the
type of labor-intensive sectors MNCs engage in. The study
finds evidence that manufacturing FDI can help to accelerate
structural transformation, as workers move out of
lower-productivity sectors (agriculture and low-skilled
services) and into higher-productivity manufacturing. |
| format |
Working Paper |
| author |
Steenbergen, Victor Hebous, Sarah Wihardja, Maria Monica Pradana, Abror Tegar |
| author_facet |
Steenbergen, Victor Hebous, Sarah Wihardja, Maria Monica Pradana, Abror Tegar |
| author_sort |
Steenbergen, Victor |
| title |
The Effect of FDI on Indonesia’s Jobs, Wages, and Structural Transformation |
| title_short |
The Effect of FDI on Indonesia’s Jobs, Wages, and Structural Transformation |
| title_full |
The Effect of FDI on Indonesia’s Jobs, Wages, and Structural Transformation |
| title_fullStr |
The Effect of FDI on Indonesia’s Jobs, Wages, and Structural Transformation |
| title_full_unstemmed |
The Effect of FDI on Indonesia’s Jobs, Wages, and Structural Transformation |
| title_sort |
effect of fdi on indonesia’s jobs, wages, and structural transformation |
| publisher |
World Bank, Washington, DC |
| publishDate |
2021 |
| url |
http://documents.worldbank.org/curated/en/912131629434571756/The-Effect-of-FDI-on-Indonesia-s-Jobs-Wages-and-Structural-Transformation http://hdl.handle.net/10986/36188 |
| _version_ |
1764484746995302400 |