A labour market information system (LMIS) is an essential instrument for labour market analysis and planning. The objective of this paper is to assess the coverage, timeliness and reliability of the existing labour market information available in Indonesia, including that generated by the existing system of public and private employment services, as well as data collected by the regular labour market surveys of the Indonesian Central Bureau of Statistics. It reviews and updates the findings of several assessments and technical assistance projects to improve the Indonesian labour market information system undertaken in the past.
Human capital development is at the top of Indonesia's economic development agenda. The National Long-Term Development Plan (RPJPN 2005-2025) identifies human resource development as one of the key drivers of the eight national development goals to be achieved by 2025. As part of this push, the government of Indonesia has taken several steps to build a skilled and competitive workforce building on the country's demographic strengths, strategic position, and sustained economic growth. An important milestone was the launch in 2016 of a national initiative known as Revitalization of Secondary Vocational Schools, which the Ministry of Education and Culture has updated recently. This initiative focuses on strengthening the quality and relevance of secondary vocational schools. Chapter one proposes a framework for defining an advanced LMIS that includes stakeholders, functions, key elements, key characteristics, and essential features that go well beyond those of an online job-matching platform. Chapter two discusses the current state of Indonesia's AyoKitaKerja, which is the focus of the analysis, is the most developed LMIS function and is considered the building block of Indonesia's LMIS. Chapter two also presents Indonesia's LMIS-related initiatives in addition to AyoKitaKerja and introduces some comparison with LMISs in other countries. Chapter three focuses in more detail on the factors that are essential for building up the five key characteristics of a well-functioning LMIS. The analysis benchmarks AyoKitaKerja against Korea's Work-net in each of these areas, with a particular focus on the job-matching function. Finally, chapter four provides a vision and action plan for developing a comprehensive LMIS.
Indonesia faces the twin challenge of maintaining high economic growth and making growth more inclusive. Most policymakers now agree that better jobs and greater productivity are fundamental for sustaining rapid and more inclusive growth. Improved productivity is essential to maintaining the country's competitiveness. Better jobs are critical for improving living standards and reducing poverty. This book focuses on Indonesia's most pressing labor market challenges and associated policy options. It provides a clear understanding of the labor market, demographic and labor force transitions, and the role of education and skills development to build the foundation for sustainable growth for the next generation.
The book focuses on Indonesia's most pressing labor market challenges and associated policy options to achieve higher and more inclusive economic growth. The challenges consist of creating jobs for and the skills in a youthful and increasingly better educated workforce, and raising the productivity of less-educated workers to meet the demands of the digital age. The book deals with a range of interrelated topics---the changing supply and demand for labor in relation to the shift of workers out of agriculture; urbanization and the growth of megacities; raising the quality of schooling for new jobs in the digital economy; and labor market policies to improve both labor standards and productivity.
The topics of unemployment, underemployment, wage trends and patterns, and the relationship between poverty and the labour market are of interest to all policy makers, researchers, academics and journalists concerned with economic development. This book traces the evolution of the Indonesian labour market between the early 1970s and late 2000s. This entails a (a) review of macroeconomic policies and their employment impact; (b) review of unemployment and underemployment trends; (c) review of wage trends and living standards; (d) relationship between poverty, inequality and the labour market; and (e) labour market regulations, employment and the business environment. The book comes up with a number of policy-relevant findings. Macroeconomic policies, particularly inflation targeting in the 2000-2007 period, have not been conducive to employment generation. The assumption that unemployment is an appropriate indicator of labour market performance and, more importantly, that it is closely aligned with poverty, is shown to be inaccurate. Sustained real wage growth in the twenty-year period before the 1997 financial crisis is contrasted with the lack of improvement since then, a period otherwise of respectable economic growth by international standards. The predicted adverse consequences of sweeping labour market regulations in 2000-2007 on properly measured employment, unemployment and labour costs did not materialize, mainly because of low compliance. It seems that a restrictive macroeconomic framework has been more constraining for employment growth than the perceived labour market rigidity during the post-crisis period. The book concludes with an evaluation of several ‘reactive’ and ‘proactive’ labour market policies. Though these are complementary, policy makers in Indonesia have probably put too much emphasis on reactive policies such minimum wage and severance pay, and not enough on proactive policies aimed at creating an adaptable and skilled workforce.
In Indonesia, the past two decades have been a time of great progress but also massive transformations and abrupt setbacks. In this context, this book reviews the main characteristics of - and trends in - demand for skills in Indonesia. It seeks to document the existence of a possible skills mismatch between employer demands and the available supply, the contribution of the education and training sector to this mismatch, and possible measures to improve the education and training system's responsiveness to what the labor market and the economy need. In today's job market in Indonesia, there appears to be a premium on theoretical and practical knowledge of the job. While skills do not appear to be yet among the most important constraints for the economy, the situation is different for larger more export-oriented manufacturing firms. Subjective assessments of difficulties of matching needs with available skills provide evidence that skills are becoming an issue overall in Indonesia. The widest gaps across professional profiles are for English and computer skills followed by thinking and behavioral skills. Theoretical and practical knowledge of the job are also considered to be weak. There are important gaps in creativity, computing and some technical skills for young workers. English remains the largest gap. Five general skill related priorities can be highlighted for Indonesia. First, the country needs to improve skill measurement to get a fuller understanding of skill needs and gaps. Second, it is urgent for Indonesia to address the still unsatisfactory quality and relevance of its formal education, including higher education. Third, the country needs to set-up multiple pathways for skill development. Fourth, the country needs to develop an integrated approach to tackle skill development for youth. Fifth, Indonesia should also tackle labor market constraints which affect the skill matching process.
