The Sources of Wage Growth in a Developing Country

Ioana Marinescu and Margaret Triyana ()
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Margaret Triyana: Nanyang Technological University, Singapore

No 9066, IZA Discussion Papers from IZA Network @ LISER

Abstract: What are the sources of wage growth in developing countries? In the US, general labor market experience is the key source of wage growth, with job seniority playing a smaller role. By contrast, in Indonesia, the 10-year return to seniority is 24 to 29%, which is higher than the return to experience. Furthermore, we estimate a 35% return to ten years of tenure in the formal sector, with no significant return to tenure in the informal sector. The difference in the sources of wage growth in Indonesia versus the US may be a reflection of Indonesia's lower level of development.

Keywords: experience; formality; informality; wages; tenure (search for similar items in EconPapers)
JEL-codes: J31 O1 (search for similar items in EconPapers)
Pages: 62 pages
Date: 2015-05
New Economics Papers: this item is included in nep-iue, nep-lma, nep-ltv and nep-sea
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Related works:
Journal Article: The sources of wage growth in a developing country (2016)
Journal Article: The sources of wage growth in a developing country (2016)
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