Heterogeneous Impact of Internet Availability on Female Labor Market Outcomes in an Emerging Economy: Evidence from Indonesia

Coordinator:
Team Member: Daniel Suryadarma, Nurmala Selly Saputri, Rezanti Putri Pramana
Completion Year:
2020
Area:
Indonesia
Topic:
Gender & Women, Labor & Migration

Description & Progress

Background

Recent progress in narrowing gender gaps in education, health, and political representation has not been matched by similar improvements in labor market outcomes for women, or more broadly, women’s economic empowerment. For women to be economically and socially empowered, it is necessary to increase both the quantity and quality of their jobs, and address gender barriers in accessing job opportunities and segregation in labor markets

The achievement of gender equality in labor market outcomes critically depends on the adoption of policies that address the “double burden” that low-income women in particular face—earning income for the family as well as caring for other household members.

The rapid pace of information and communication technology (ICT) advancement has a significant impact on the economy. The internet enables lower cost of transmitting information and fosters development of new innovation in the economy. While digital technologies increase work flexibility, it may also cause some low-skilled jobs to become obsolete through automation. However, the availability of the internet may open new job opportunities even for low-skilled individuals. Thus, examining the heterogeneity in the impact of the internet on female labor market outcomes is important.

Indonesia’s context with regard to this issue is interesting to study. The country’s female labor force participation rate remains unchanged at around 52% for the last two decades despite the rapid economic growth, fertility decline, and increased female education attainment. On the other hand, Indonesia has undergone an extremely rapid increase of internet availability. Between 2010 and 2018, internet access in urban areas had increased from 30% to 72% for high income individuals and from 7% to 32% for low income individuals. In rural areas, the increase is more rapid: from 13% to 50% for high income individuals, and from 2% to 20% for low income individuals.

 

Objective

Our study aims to answer the following research questions.

  1. What is the average impact of internet availability on female labor market outcomes? Is there any heterogeneity in the impact of internet availability by education and age?
  2. What are the working mechanisms through which internet availability influence women in deciding their labor force participation, especially on subsample of recent mothers?

The quantitative approach will answer the first research question, while the second research question will be answered using qualitative approach.

 

Methodology

We will use a district-level longitudinal dataset from 2007 to 2018, which covers before and during the internet boom in Indonesia. As each worker subgroup tends to respond differently to technological changes, this study will emphasize on the heterogeneous impact of the internet. Our heterogeneity analysis will examine the subsamples of low-educated females, high-educated females, young females, and older females. The qualitative portion of this study will assess the internet’s role in facilitating or challenging the transition process of previously working mothers who recently gave birth, a subgroup of women predicted to be the most affected by the internet’s growing accessibility.


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