The labour market in Indonesia, 2001-2024

Indonesia’s labour market absorbed over 50 million additional workers between 2001 and 2024, while unemployment fell from 8% to under 5%. Yet job quality has not kept pace. Structural transformation, the movement of workers out of agriculture, has largely bypassed manufacturing and channeled labour into low-value-added services; 58% of workers remain informal; median earnings stand roughly 40% below the average minimum wage, even though more than a quarter of the workforce works over 48 hours per week; and female labour force participation trails male participation by 28 percentage points. These four interconnected features define Indonesia’s labour market challenge.

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Publication Details

Journal
IZA World of Labor
Published
2026-11-04
DOI
https://doi.org/10.66255/wol.533
Primary Topic
Labor market dynamics and wage inequality
Type
article
Field-Weighted Citation Impact
0.00
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article

The labour market in Indonesia, 2001-2024

kelvin ramadhan hidayat, Eny Sulistyaningrum, Wisnu Setiadi Nugroho
IZA World of Labor
Labor market dynamics and wage inequality
article

The labour market in Indonesia, 2001-2024

kelvin ramadhan hidayat, Eny Sulistyaningrum, Wisnu Setiadi Nugroho
article en

Abstract

Indonesia’s labour market absorbed over 50 million additional workers between 2001 and 2024, while unemployment fell from 8% to under 5%. Yet job quality has not kept pace. Structural transformation, the movement of workers out of agriculture, has largely bypassed manufacturing and channeled labour into low-value-added services; 58% of workers remain informal; median earnings stand roughly 40% below the average minimum wage, even though more than a quarter of the workforce works over 48 hours per week; and female labour force participation trails male participation by 28 percentage points. These four interconnected features define Indonesia’s labour market challenge.

IZA World of Labor
Universitas Gadjah Mada (ID), Barcelona School of Economics (ES)
Openalex Percentile: Top 11%
Labor market dynamics and wage inequality
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