DOES INDONESIA HAVE A 'LOW PAY' CIVIL SERVICE?

Abstract

Government officials and polcy analysts
\n maintain that Indonesia's civil servants are poorly
\n paid and have been for decades. This conclusion is supported
\n by anecdotal evidence and casual empiricism. The authors
\n systematically analyze the realtionship between government
\n and private compensation levels using data from two large
\n household surveys carried out by Indonesia's Central
\n Bureau of Statistics: the 1998 Sakernas and 1999 Susenas.
\n The results suggest that government workers with a high
\n school education or less, representing three-quarters of the
\n civil service, earn a pay premium over their private sector
\n counterparts. Civil servants with more than a high school
\n education earn less than they would in the private sector
\n but, on average, the premium is far smaller than commonly is
\n alleged and is in keeping with public/private differentials
\n in other countries. These results prove robust to varying
\n econometric specifications and cast doubt on low pay as an
\n explanation for government corruption.