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# EXECUTIVE SUMMARY

i. The importance of women in economic activity has increased with their labor force participation rate increasing from 33 per cent to 39 per cent over the 1980 to 1990 period. Furthermore the highest increase, at 9 per cent per annum over the same period, was experienced by female labor force participation in the urban area. The rate of participation is expected to continue to increase reaching 44 per cent by 1998. The increase in female participation rate can be attributed to increased employment opportunities resulting from economic growth and in particular, the outward oriented strategy followed by Indonesia since the mid 1980s which has led to rapid annual growth of manufactured exports of 29 per cent over the 1985-94 period. Growth of labor intensive exports has been higher at 34 per cent p.a. and the share of labor intensive exports has gone up from 32 per cent to 45 per cent of manufactured exports over the same period. The main labor intensive exports in Indonesia comprise of textiles, garments and footwear which together account for 37 per cent of manufactured exports and an estimated 24 per cent of the labor force in the manufacturing sector (BPS, Statistic Industry 1993). The increase in female participation, has also been due to women workers receiving better education, postponement of marriage, social mobility and changing values about women working outside the home (Manning 1993:65).

ii. Previous studies of women workers in the formal sector indicate that there is a tendency for firms in labor intensive export activities and manufacturing sectors to offer lower wages, minimum safety standards for workers and even violate worker rights. The production in such firms is characterized by mass production, utilization of standard technology, and exports are subject to intense competition. Ensuring workers' welfare and minimizing worker-employer friction, protecting and supporting workers' rights and ensuring that they work in a clean and safe environment is very important in enhancing labor productivity. Weak compliance with regulations and standards could be related to ignorance of workers about their rights, ineffectiveness of labor unions and difficulties in enforcing centrally mandated legislation and standards. Ineffectiveness of labor unions can also be related to goverm-nent intervention. The latter can be caused by government regulations regarding labor unions or can be due to the effectiveness of the organization itself. Failure to ensure that workers are paid due compensation and that their safety and welfare are safeguarded, can be due to either inadequate legislation or lack of compliance by companies with regard to the labor regulations.

iii. In the Indonesian context, the issues have become increasingly important. Inadequate legislation does not appear to be the reason for poor working conditions, rather it has been due to difficulties in enforcing centrally mandated standards and lack of self regulation due in part to the absence of effective trade unions or representation of workers. The issue is also important for the sustainability and productivity of Indonesia's exports. Furthermore, the minimum wage in Indonesia has more than tripled in the 198995 period. Therefore, it is important to undertake a systematic study to understand whether frms in export oriented and labor intensive sectors are complying with