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Labour market dimensions of poverty in Indonesia

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  • Armida Alisjahbana
  • Chris Manning

Abstract

This paper focuses on labour market issues relevant to poverty alleviation. Patterns of participation, unemployment and employment are examined among the poor compared with the non-poor in general, among urban and rural households, and among various socio-demographic groups. Using data from the 2002 National Socio-Economic Survey, the paper finds that low participation in the workforce and high unemployment, while important, are less closely related to poverty status than expected, especially among spouses of household heads. However, sector of employment and underemployment are closely associated with poverty, especially for those in informal jobs in urban areas; in rural areas, the poor are heavily concentrated in agriculture. Among the poor, young people and females are more likely to be underemployed and to work in agriculture than prime-age workers. The data suggest that labour market policies that tend to protect those in formal sector employment are unlikely to reduce poverty much, if at all.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Bulletin of Indonesian Economic Studies.

Volume (Year): 42 (2006)
Issue (Month): 2 ()
Pages: 235-261

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Handle: RePEc:taf:bindes:v:42:y:2006:i:2:p:235-261

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  1. Duncan Thomas & James P. Smith & Kathleen Beegle & Graciela Teruel & Elizabeth Frankenberg, 2002. "Wages, employment and economic shocks: Evidence from Indonesia," Journal of Population Economics, Springer, vol. 15(1), pages 161-193.
  2. Daniel Suryadarma & Asep Suryahadi & Sudarno Sumarto, 2005. "The Measurement and Trends of Unemployment in Indonesia : The Issue of Discouraged Workers," Labor Economics Working Papers 22545, East Asian Bureau of Economic Research.
  3. Bird, Kelly & Manning, Chris, 2008. "Minimum Wages and Poverty in a Developing Country: Simulations from Indonesia's Household Survey," World Development, Elsevier, vol. 36(5), pages 916-933, May.
  4. Huppi, Monika & Ravallion, Martin, 1990. "The sectoral structure of poverty during an adjustment period : evidence for Indonesia in the mid-1980s," Policy Research Working Paper Series 529, The World Bank.
  5. Asep Suryahadi & Wenefrida Widyanti & Daniel Perwira & Sudarno Sumarto, 2003. "Minimum Wage Policy And Its Impact On Employment In The Urban Formal Sector," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 39(1), pages 29-50.
  6. L. Alan Winters & Neil McCulloch & Andrew McKay, 2004. "Trade Liberalization and Poverty: The Evidence So Far," Journal of Economic Literature, American Economic Association, vol. 42(1), pages 72-115, March.
  7. Alan Manning & Ted To, 2002. "Oligopsony and Monopsonistic Competition in Labor Markets," Journal of Economic Perspectives, American Economic Association, vol. 16(2), pages 155-174, Spring.
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