Informal Employment in Indonesia

47 Pages Posted: 18 May 2010

See all articles by Sining Cuevas

Sining Cuevas

Asian Development Bank - Economic and Research Department

Aleli Rosario

Asian Development Bank - Economic Research

Marissa L. Barcenas

Asian Development Bank

Mina Christian

affiliation not provided to SSRN

Date Written: April 1, 2009

Abstract

The paper attempted to use the February 2007 round of Indonesia’s National Labor Force Survey (Sakernas) for a comparative analysis of wages and benefits of formal and informal workers. While Sakernas was not designed for this purpose, the study explored questions in the existing survey that can be used to distinguish formal and informal workers. Because of data limitation, workers were classified as employed informally or “mixed” – a category composed of workers who cannot be identified, with precision, to be engaged in either formal or informal employment. Given this constraint, informal employment was estimated at the minimum to be at 29.1% of total employment in Indonesia. Informal employment is also highly concentrated in rural areas and is prevalent in agriculture and construction sectors. More women are likely to be informally employed than men, and women generally receive lower pay and are mostly unpaid family workers. To the extent possible the study was able to examine informal employment in Indonesia and to identify the gaps in the Sakernas questionnaire that can be addressed in future rounds of the survey for a successful comparative analysis between formal and informal workers.

Keywords: Indonesia, informal employment, informal sector, gender analysis, wage differentials

Suggested Citation

Cuevas, Sining and Rosario, Aleli and Barcenas, Marissa L. and Christian, Mina, Informal Employment in Indonesia (April 1, 2009). Asian Development Bank Economics Working Paper Series No. 156. Available at SSRN: https://ssrn.com/abstract=1611406 or http://dx.doi.org/10.2139/ssrn.1611406

Sining Cuevas (Contact Author)

Asian Development Bank - Economic and Research Department ( email )

Kasumigaseki Building 8F 3-2-5
Kasumigaseki, Chiyoda-ku
Tokyo, 100-6008
Japan

Aleli Rosario

Asian Development Bank - Economic Research ( email )

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines

Marissa L. Barcenas

Asian Development Bank ( email )

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines
(632) 632-6658 (Phone)

HOME PAGE: http://www.adb.org

Mina Christian

affiliation not provided to SSRN ( email )

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