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Impacts and Strategies Behind COVID-19-Induced Economic Crisis: Evidence from Informal Economy

Author

Listed:
  • Agus Joko Pitoyo

    (Universitas Gadjah Mada
    Universitas Gadjah Mada)

  • Bagas Aditya

    (Universitas Gadjah Mada)

  • Ikhwan Amri

    (Universitas Gadjah Mada)

  • Akbar Abdul Rokhim

    (Universitas Gadjah Mada)

Abstract

The COVID-19 pandemic has put pressure on the informal sector, especially in developing countries. Regarding the case study found in Yogyakarta Special Region (Indonesia), this research focuses on workers in the informal sector with the following objectives: (1) to assess the impacts of COVID-19 pandemic on informal workers’ conditions, (2) to identify their strategies for surviving the crisis, and (3) to analyze the existing social safety net to support their livelihood. This study surveyed 218 respondents who worked in the informal, non-agricultural sector. The data were analyzed using descriptive statistical techniques. The results confirmed that most respondents underwent a decrease in working hours and incomes. In general, they have particular coping mechanisms to survive. The results also found that most respondents had high hopes for social assistance to stabilize their livelihood. Several government programs had been issued, either by improving policies before the pandemic or by creating new ones. However, there were many barriers and challenges to implementing them so that some recommendations had been suggested in this study to help the informal workers to become more resilient.

Suggested Citation

  • Agus Joko Pitoyo & Bagas Aditya & Ikhwan Amri & Akbar Abdul Rokhim, 2021. "Impacts and Strategies Behind COVID-19-Induced Economic Crisis: Evidence from Informal Economy," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 64(3), pages 641-661, September.
    • Handle: RePEc:spr:ijlaec:v:64:y:2021:i:3:d:10.1007_s41027-021-00333-x
    DOI: 10.1007/s41027-021-00333-x
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    More about this item

    Keywords

    COVID-19; Economic crisis; Informal economy; Indonesia;
    All these keywords.

    JEL classification:

    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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