Analysis of Trends and Challenges in the Indonesian Labor Market

Publication | March 2016
Analysis of Trends and Challenges in the Indonesian Labor Market

Integrated solutions are required across education, infrastructure, economic sectors, and the social sectors, in order to promote quality employment and support employment creation in Indonesia.

Employment quality is a major issue in Indonesia, and compliance with existing labor regulations is very low. Youth unemployment, skills shortages, and skills mismatches are also persistent challenges. Gains in labor productivity have been slow, and a multifaceted approach for accelerating labor productivity is required to support growth in higher value-added activities.

Indonesia needs to ensure that new entrants to the labor force are equipped to support economic development. Labor market institutions need to provide an enabling environment for supporting economic growth and job creation. Social protection and social security systems need to support the productivity of the labor force and help to resolve issues related to poverty and inequality.

The paper provides an overview of trends in Indonesia's labor market, including general employment trends, trends related to skills and education, employment quality trends, and earnings and governance trends.

Contents 

  • Executive Summary
  • Introduction
  • Overview of Labor Market Trends
  • Government Framework for Promoting Employment
  • Key Challenges for the Labor Market