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Labor market development in Indonesia Has it been for all?

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  • Muhamad Purnagunawan

    ()
    (Department of Economics, Padjadjaran University)

  • Victor Pirmana

    ()
    (Department of Economics, Padjadjaran University)

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    Abstract

    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. Highincrease 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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    File URL: http://lp3e.fe.unpad.ac.id/wopeds/201317.pdf
    File Function: First version, 2013
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    Bibliographic Info

    Paper provided by Department of Economics, Padjadjaran University in its series Working Papers in Economics and Development Studies (WoPEDS) with number 201317.

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    Length: 14 pages
    Date of creation: Jul 2013
    Date of revision: Jul 2013
    Handle: RePEc:unp:wpaper:201317

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    Keywords: Employment; Formal Sector; Indonesia;

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    1. Armida Alisjahbana & Chris Manning, 2002. "Survey of Recent Developments," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 38(3), pages 277-305.
    2. Haryo Aswicahyono & Hal Hill & Dionisius Narjoko, 2010. "Industrialisation after a Deep Economic Crisis: Indonesia," Journal of Development Studies, Taylor & Francis Journals, vol. 46(6), pages 1084-1108.
    3. Chris Manning & Raden M. Purnagunawan, 2011. "Survey of recent developments," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 47(3), pages 303-332, December.
    4. Agus Priyambada & Asep Suryahadi & Sudarno Sumarto, 2005. "What Happened to Child Labor in Indonesia during the Economic Crisis : The Trade-off between School and Work," Labor Economics Working Papers 22535, East Asian Bureau of Economic Research.
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