Journal of Indonesian Economy and Business

The Retirement Consumption Puzzle Effect in Indonesia: Evidence from IFLS 4 and 5

Margareta Vania Putri, Catur Sugiyanto — Thu, 18 Jan 2024 09:17:09 +0700

Introduction/Main Objectives: This study aims to see whether the retirement consumption puzzle occurs in Indonesia. The retirement consumption puzzle refers to when there is a decline in consumption in retirement which is not in line with the life-cycle hypothesis. Background Problems: Previous studies have revealed that consumption shifts when entering retirement due to efficient spending. This research analyzes the consumption pattern of the Indonesian elderly peculiarly in the frame of the retirement consumption puzzle. Novelty: There is a lack of studies on the effect of retirement on consumption by Indonesian retirees and prior research has focused on the impact of retirement on household expenditure. Research Methods: This study uses data from the Indonesian Family Life Survey (IFLS) wave 4 and 5 from the years 2007 and 2014. It uses panel data and the total sample is 2,556. It also uses the difference in differences (DiD) method to see whether the change in labor status toward retirement causes a decrease in consumption in households in Indonesia. Then, this study also uses the division of age categories as the robustness check. Finding/Results: The results of this study show that there is a retirement consumption puzzle in Indonesia indicated by a decrease of 19.9% in total expenditure per capita. Conclusion: The consumption decrease in retirement demonstrates that the government should consider pension funds and create social security programs to maintain the welfare of elderly people.

Employee Satisfaction Factors in the E-Commerce Company: The Mediating Role of Employee Engagement

Ahmad Azmy — Thu, 18 Jan 2024 09:34:36 +0700

Introduction/Main Objectives: This study discusses the factors that have implications for job satisfaction in e-commerce companies. The focus of the study is to analyze the organizational commitment, spiritual leadership, and technological advancement, which are mediated by employee engagement. Background Problems: Some e-commerce companies have problems with their employees’ level of satisfaction. This study provides recommendations for dealing with the satisfaction factors of employees working in e-commerce. Novelty: The novelty of this study is that it offers a different model for measuring job satisfaction. Employee engagement is used as a mediating variable to measure the implications for employee satisfaction in e-commerce companies. One of the variables used is technological advancement. Research Methods: This study uses the PLS-SEM method. The total respondents is 250 employees who work in e-commerce companies. Purposive sampling is used, according to the research needs, with a total of 207 respondents. The object of this study is a business organization that is engaged in e-commerce. Finding/Results: The direct and indirect effects of employee satisfaction are implied by spiritual leadership and organizational commitment. Technological advancement has no direct or indirect effect on employee satisfaction. Employee engagement has a mediating role in both the direct and indirect effects on employee satisfaction. Conclusion: E-commerce organizations should pay more attention to their employees’ development through building their technological capabilities. This research can explain the improvement in a business’s quality through its employees’ satisfaction. This adds value to human resources management.

The Impact of Input Tariffs on Gender Inequality: An Empirical Study in Indonesia

Noorish Heldini — Thu, 18 Jan 2024 10:13:58 +0700

Introduction/Main Objectives: Discrimination between male and female workers occurs because of the difference in the “endowment” and social and cultural norms, especially in developing countries. This study aims to examine the impact of input tariffs on the ratio of female workers who are differentiated, based on technology-intensity and the labor-intensive sector and the non-labor-intensive sector. Background Problems: Trade openness contributes to technological change so companies reallocate resources more efficiently and reduce discrimination. Previous studies have yielded ambiguous results regarding input tariffs and the ratio of female workers. Therefore this study attempts to estimate the impact of input tariffs on the ratio of female workers in Indonesia. Novelty: In contrast to the previous studies that did not include the lag-dependent variable, this study includes the lag variable female labor ratio as an exogenous variable in the estimation. Research Methods: Using FE-IV, panel data at the company level for the period from 2003 to 2015. Finding/Results: The estimation results show that trade openness can eliminate discrimination and increase the ratio of female workers. When firms are differentiated by their technology-intensity, the reduction in input tariffs leads to an increase in the ratio of female workers in medium and high technology-intensity firms, and non-labor-intensive firms, where the impact is the same between importing and non-importing firms. The estimation results show that trade openness can eliminate discrimination and increase the ratio of female workers entering the market. Conclusion: Trade openness can have both positive and negative impacts on Indonesian workers, especially female workers. To increase female labor participation, the Indonesian government needs to implement supporting policies, to improve equitable access to education for all citizens in Indonesia, needs to provide child-care facilities around office areas, flexibility in working hours for women, training and skills, and provide opportunities for women to occupy strategic positions.

The Effect of Prepayment Contract Frames and Feedback on Budgetary Slack: An Experimental Investigation

Frida Fanani Rohma, Nur Anita — Thu, 18 Jan 2024 00:00:00 +0700

Introduction/Main Objectives: This research investigates the effect of prepayment contract frames and feedback incentives in mitigating budgetary slack. Background Problems: Clawback is an incentive scheme based on the endowment concept that has recently drawn researchers’ concerns. The literature suggests emphasizing the endowment and loss aversion concepts. This research examines these two concepts with one test model. Novelty: This research presents the preliminary manipulation role of hybrid clawback as one of the prepayment contract frames that are smoother and without penalty provisions. This study also examines the interaction between the concept of endowment and loss aversion in one test model. Research Methods: This research applied a field experiment with a 3 × 2 between-subject design. Finding/Results: This research found that prepayment contract frames require motivation from an adequate formal control system through frequent feedback to mitigate the slack. The findings prove that the capability of prepayment contract frames to minimize slack would be more effective after the frequency of the feedback has been moderated. Conclusion: The hybrid clawback could be a smoother alternative compensation scheme that is just as effective as a simple clawback, but without any penalty provisions. The effectiveness of a low feedback frequency could be increased to equal the efficacy of a high feedback frequency when assisted by prepayment contract frames.

The Effect of the Covid-19 Pandemic on Mental Health: Quasi-Experimental Evidence from Indonesia

Thu, 18 Jan 2024 00:00:00 +0700

Introduction/Main Objectives: This research aims to explore and analyze the effect of the COVID-19 pandemic on mental health status as measured by DASS-21. Background Problems: The prolonged impact of the COVID-19 pandemic on the global economy may have adversely affected mental health. A decrease in income and consumption and the uncertainties surrounding job security and business performance have been some of the main factors contributing to mental health issues. Novelty: This paper aims to evaluate the effect of the COVID-19 pandemic—as a natural experiment—on mental health measured by DASS-21 and how the effect of the pandemic varied across different socioeconomic subgroups. Research Methods: We conducted an online survey across Indonesia to collect self-reported mental health status and socioeconomic characteristics before and during the COVID-19 pandemic to measure its impacts on mental health. Finding/Results: Our results suggest that the COVID-19 pandemic has had an adverse impact on mental health, particularly in terms of anxiety and stress. The effect has been higher among individuals with lower self-efficacy, lower expenditure, and lower education levels. Conclusion: The health and economic crisis driven by the COVID-19 pandemic affected individuals' mental health, suggesting the need for appropriate policy responses.