Analysis of Determinants of Wage Disparity for Labor Sector in Central Sulawesi-Indonesia

Abstract

The research was purposed to: (1) analyze disparity level of wage labor distribution in the agricultural sector (generally) and non agricultural sector (industry and service sector) in Central Sulawesi; (2) analyze and identifie of wage labor distribution in the agricultural sector (generally) and non agricultural sector (industry and service sector) in Central Sulawesi based on  the influence of individual characteristics (age, sex, marital status and numbers of family dependent), the work characteristics (work type, work status, location and number of work time) and the human capital characteristics (the level of education and experience); (3) and analyze the roles of each factors from individual characteristics (age, sex, marital status and numbers of family dependent), the work characteristics (work type, work status, location and number of work time) and the human capital characteristics (the level of education and experience). The result showed that: (1) disparity level of wage labor distribution in the agricultural sector and non agricultural sector (industry and service sector) in Central Sulawesi were included in moderat level which marked by 0,39 poin from Gini Index Value; (2) the most of exogenous variable have significant effect on wage through Mincer Wage Function on agricultural sector and non agricultural sector; (3) real wage based on Blinder-Oaxaca Decompositions result between agricultural sector  and non agricultural sector was 0,272835, means that the wage of labor on non agricultural sector  was 27,28 persent higher than labor on agricultural sector. Following that the total of  wage Disparity, 0,237136 or 86,92 percent was from different characteristics factors (explained/endowment), while the wage disparity from minor factors (unexplained/discriminations) between agricultural sector and non agricultural sector was 0,035699 or 13,08 percent from total of  wage disparity.

Keywords: wage disparity, sectoral labor,  blinder-oaxaca decompositions.