What Causes Children to Work in Indonesia?

Abstract

This study contributes to the existing literature by empirically exploring the causes of child labor in the Indonesian labor market. Factors identified include rate of poverty, average wages, education participation, and quality of education. This study utilized an aggregate data of 301 districts and cities across 34 provinces sourced from the National Labor Force Survey and the National School/Madrasah Accreditation Board of the Republic of Indonesia. Using a multiple regression analysis, the study found strong evidence of the positive effect of poverty on child labor. Conversely, the study documented the adverse impact of average wages on child labor in Indonesia. Similarly, the participation in the education system also contributed negatively to the child labor. Finally, the quality of education services is found to have a negative effect on child labor in Indonesia. The findings of this study suggest that, in efforts to reduce the involvement of children in the workforce, the poverty eradication program should be enhanced. The wages should be continuously improved, at least, in par with the changes in prices. Finally, the quality of education and its services ought to be further enhanced to attract more child student participation rates across junior high schools nationwide.