Mobility, Scarring and Job Quality in Indonesia?S Labor Market

44 Pages Posted: 20 Apr 2016

See all articles by Darian Naidoo

Darian Naidoo

The World Bank

Truman G. Packard

World Bank - Europe and Central Asia Region; University of Oxford - Department of Economics

Ilmiawan Auwalin

The University of Sydney - School of Economics

Date Written: November 9, 2015

Abstract

This paper investigates the occupational mobility and job quality of young people in Indonesia and relates this to the concept of ?scarring.? The concept of labor market scarring in this paper is the occurrence of low or zero returns to certain types of work (for example, self-employment). Scarring is expected to occur whenever an individual spends periods working in occupations in which their human capital is either stagnant or deteriorating. Fixed effects estimations using panel data from the Indonesian Family Life Survey reveal that a period in self-employment is associated with negative returns for youth (about 3 to 4 percent per year penalty), but not for older adults. In addition, there are clear patterns of persistence in self-employment over time with few individuals progressing from petty self-employment to businesses with permanent workers.

Keywords: Labor Markets, Employment and Shared Growth, Rural Labor Markets, Pro-Poor Growth, Equity and Development, Achieving Shared Growth

Suggested Citation

Naidoo, Darian and Packard, Truman G. and Auwalin, Ilmiawan, Mobility, Scarring and Job Quality in Indonesia?S Labor Market (November 9, 2015). World Bank Policy Research Working Paper No. 7484, Available at SSRN: https://ssrn.com/abstract=2688382

Darian Naidoo (Contact Author)

The World Bank ( email )

Sydney, 2000
Australia

Truman G. Packard

World Bank - Europe and Central Asia Region ( email )

1818 H Street
Washington, DC 20433
United States

University of Oxford - Department of Economics ( email )

Manor Road Building
Manor Road
Oxford, OX1 3BJ
United Kingdom

Ilmiawan Auwalin

The University of Sydney - School of Economics

Rm 370 Merewether (H04)
The University of Sydney
Sydney, NSW 2006 2008
Australia

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