CEDS UNPAD

Labor market development in Indonesia Has it been for all?

This paper look at the long-run evolution of various labor market indicators in Indonesia over the period of 1992 to 2012 using the National Socioeconomic Survey (SUSENAS) data to describe the development before and after the reform era. Four indicators are used in this study to measure the labor market performance, which are formality rate,working poor rate, not in employment and education rate and child labor rate. Those indicators are calculated by per capita expenditure quintile to capture the equity aspect of labor market development. In addition, we also analyze in more detail the labor market condition in urban andrural separately. We found that while in general there have been some improvement during the period,there is a widening gap in some of the indicators especially in the formality rate betweenthe poor and other income class over that particular period that need special attention. High increase in the minimum wages and more rigid labor regulation in the beginning of decentralization era and also economic crisis might explain part of the widening gap. Furthermore, there are also serious and persistence problem in the quality of jobs in Indonesia, where having a job is not ensuring people out of poverty.

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Center for Economics and Development Studies is a research center under the Department of Economics, Padjadjaran University, Indonesia. A leading research institute in Indonesia in the area of economics and development studies.
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