Is There a Gendered Parenthood Penalty in Indonesian Labor Markets?

Investment Rating - The report does not provide a specific investment rating for the industry analyzed Core Insights - The study investigates the parenthood penalty in Indonesian labor markets, focusing on gender disparities, revealing that childbirth significantly negatively impacts women's employment for up to six years, while men experience only short-lived effects [3][12][22] - The analysis highlights the role of socioeconomic factors, such as education level and urban versus rural residence, in moderating the parenthood penalty, suggesting that policies aimed at promoting gender equality in the labor market are essential [3][12][22] Summary by Sections Introduction - The report emphasizes the critical impact of parenthood on women's labor market outcomes, noting that the parenthood penalty is well-documented in various countries and is particularly relevant in Indonesia, where female labor force participation has stagnated around 50% [8][9][10] Methodology - The study employs a Difference-in-Differences (DID) approach using longitudinal data from the Indonesia Family Life Survey (IFLS) spanning from 1993 to 2014, allowing for a comprehensive analysis of labor market trajectories before and after childbirth [14][50][54] Findings - The findings indicate that women in urban areas and those with higher education levels face larger and more prolonged penalties, while rural women and those with extended family support recover more quickly [22][24] - The report reveals that households with extended family members experience faster recovery from the birth penalty, with penalties becoming insignificant by the second year after childbirth, contrasting with households without extended family support, where penalties persist until year seven [22][24] Policy Implications - The report suggests that expanding access to childcare services could significantly reduce the persistence of the birth penalty, particularly for highly educated urban women, who experience the largest and most persistent penalties [22][24]