Labour Market Transitions of Men and Women During an Economic Crisis: Evidence From Indonesia

Abstract

Abstract Indonesia is in the midst of a major financial, economic, and political cns1s. The magnitude and unexpected nature of the crisis are particularly stunning when contrasted with the country’s recent economic success. During the three decades prior to the crisis, Indonesia enjoyed sustained economic growth, accompanied by an impressive reduction in poverty, significant improvements in the health and human capital of the population and a shift in the structure of production away from agriculture towards higher paying manufacturing and service sector jobs. There are many ways one might summarize changes in the labour market; one often used metric is growth in hourly earnings which is likely to be related to changes in productivity. That growth has been dramatic. Real hourly earnings of the median female worker in the formal or market sector in 1997 was about twice that of the median female market sector worker a decade earlier; for men, real hourly earnings increased by about 50 per cent during this time (Smith et al.2002).