Investigating the Role of Education in Stability of Work Participation in Economic Shocks from the Asian Financial Crisis to the Covid 19 Pandemic in Indonesia

Abstract

Purpose: The objective of this study was to investigate some connection between population, education, and work participation in Indonesia on the economic shock of the world monetary disaster, Asian financial crisis, Europe's budget deficit, and COVID-19. Theoretical framework: In the theory of modern economic growth which was developed from the classical economic theory of Adam Smith, it is explained that education is one of the determinants of economic growth that increases human work performance and increases employment (Ucak, 2015). Research from Adirosa (2021) states that classical theory is still relevant as a basis for understanding economic phenomena. Design/methodology/approach: To see the role of education in employment and in this study is work participation in times of economic shock, an autoregression behavior analysis was used. Findings: We found that the COVID-19 pandemic-related economic shocks on work participation in Indonesia were greater than the economic shocks in the previous period. Education was able to anticipate work participation shocks due to economic shocks. Research, Practical & Social implications: Our findings affirms that economic shocks affect work participation and behavior changes of the educational-population-growth connection on work participation. Originality/value: The results indicate that education is a key component in dealing with future economic shocks, particularly those of a major reduction in labor participation.