Th is study assesses the impact of foreign direct investment (FDI) on gendered labour markets in rural Indonesia. It focuses on the gender composition of the workforce, female and male workers’ employment conditions and gender wage inequality. Th e research strategy of »between-methods triangulation« is chosen, denoting the combination of quantitative and qualitative types of data generation and analysis. Two underlying mechanisms have been identifi ed. A »cost eff ect« associated with transnational corporations’ (TNCs’) greater orientation towards the world market is the preferential recruitment of, on average, lower paid female workers. In light of global competitive cost considerations, this appears as a rational strategy for TNCs. Conversely, foreign fi rms’ advanced technological endowments relative to domestic companies require a well-educated workforce with technical skills. In light of these perspectives, gender gaps in education and, on average, women’s weaker labour market attachment disadvantage female workers’ employment in TNCs. Both eff ects are mediated by a »reproductive constraint«. Th is refers to the asymmetric distribution of reproductive obligations between female and male household members, whereby female input into the domestic economy is more demanding relative to that of males.

Indonesia, economic methodology, foreign direct investment, gender, globalisation, labour markets
Economic Methodology (jel B41), International Economic Order; Noneconomic International Organizations, Economic Integration and Globalization: General (jel F02), International Investment; Long-Term Capital Movements (jel F21), Economics of Gender; Non-labor Discrimination (jel J16), Wage Level and Structure; Wage Differentials by Skill, Training, Occupation, etc. (jel J31)
European Journal of Economics and Economic Policies: Intervention
International Institute of Social Studies of Erasmus University (ISS)

Siegmann, K.A. (2006). Globalisation, gender, and equity - effects of foreign direct investment on labour markets in rural Indonesia. European Journal of Economics and Economic Policies: Intervention, 3(1), 113–130. Retrieved from