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Yandi Yusnandar, B.S. Nazamuddin, Raja Masbar and Abd. Jamal
''Determinants of labor force participation and its impact on the standard of living of working age individuals in Indonesia, a gender perspective''
( 2020, Vol. 40 No.2 )
The purpose of this study is to examine what determines the labor force participation and its influence on the standard of living. Since individuals are not randomly selected in the sample, the Heckman selection model was used in which two equations were sequentially estimated. A data set on individuals was sourced from the 2018 Indonesian National Labor Force Survey. The results show that there are striking differences in the effects of major determinants of work participation between men and women in various age cohorts. Marital status is a major determinant that positively affects men's work participation, whereas for women it is mainly influenced by their education. The authors also observed the existence of an inverted U-shaped pattern in the effects of various determinants of labor force participation for men and women. Educational attainment, especially in the secondary and tertiary levels, as well as training is an important factor that determines the achievement of a decent standard of living. Nevertheless, the positive effect of educational attainment is lower in regions where poverty incidence is high. The authors suggest that the government need to provide more scholarships for tertiary education, both for men and women equally. Accordingly, the government can ultimately improve the well-being, a decent standard of living, of the society at large.
Keywords: decent standard of living, labor force participation, Heckman selection model
JEL: J2 - Demand and Supply of Labor: General
J1 - Demographic Economics: General
Manuscript Received : Oct 16 2019 Manuscript Accepted : Apr 15 2020

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