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04 Apr 2016

Women interrupted: Determinants of Women’s Employment Exit and Return in Indonesia

Diahhadi Setyonaluri, March 2103
The Australian National University

In Western countries, marriage and childbearing have consistently been shown to be major stages in the life cycle that affect women’s employment continuity. Women in these countries generally withdraw from the workforce at marriage or at the onset of motherhood. However, in Indonesia, the characteristics and effects of such an interrupting feature in women’s working patterns still remain unclear. Existing studies fail to explore the dynamic nature of employment behavior, particularly employment interruption which is a strong feature of women’s labour market behavior.

This thesis examines the factors that contribute to interruptions in women’s employment in Indonesia. It adopts a discrete-time event history analysis to explore the determinants of female’s transition out from and back into employment. It pays specific attention to the effect of the family life cycle on women’s decision to leave and return to employment. Using a longitudinal data collection called the Indonesia Family Life Survey (IFLS), this thesis seeks to answer four questions: (1) To what extent and when do women experience work interruption?; (2) To what extent do marriage and childbearing influence women to leave employment?; (3) To what extent does being in the later stages of childrearing influence women to return to employment?; (4) What are the roles of education and employment characteristics in determining women’s decisions to leave and return to work?

The results of the analyses conducted in this study show that work interruption is common among women in Indonesia. Marriage and the onset of motherhood have been found to have a positive association with the risk of leaving employment. In particular, the effect of entering marriage on employment exit is stronger for women working in low-level occupations and for women with junior and senior secondary levels of education. This study also finds that having tertiary education and working in the public sector reduces the risk of experiencing an employment interruption.

Meanwhile, the later stages of childrearing, measured by the age of the youngest child, have been found to have no significant effect on women’s employment return. However, the presence of children does have a strong effect on the risk of returning to work in the informal rather than in the formal sector. The risk of reentering employment after a work interruption is also positively associated with the number of young children, indicating that women would return to work more quickly when the economic burden in the family increases. This study also finds that formal workers tend to be employed in the same sector when they decide to return to work.

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