From Crisis to Recovery: Understanding the Impact of COVID-19 on Indonesian Employment Dynamics
Article Sidebar
Main Article Content
Abstract
This research analyzes the impact of the economic disruption caused by the COVID-19 pandemic on Indonesia’s labor market by utilizing data from SAKERNAS, or the National Labor Force Survey, for 2020 and 2021. A logistic regression model is used to analyze the impact of sociodemographic factors, job-related variables, and the Kartu Prakerja (a pre-employment program focused on training and skill development) on unemployment, labor force participation, and reduced working hours caused by the economic disruption of COVID-19. The findings underscore the enduring repercussions of the pandemic on employment landscapes, with pronounced impacts observed among older workers, married individuals, less educated workers, and urban residents. The manufacturing and service sectors experienced more significant implications than agriculture, revealing sector-specific challenges. Kartu Prakerja influenced working hour reductions in 2021, showing the effects of evolving government intervention. Increased Internet use was linked to reduced working hours, signaling the need for accelerated digital skill programs for jobs dependent on Internet use.
Article Details
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
References
• Abraham, R., Basole, A., & Kesar, S. (2022). Down and out? The gendered impact of the COVID-19 pandemic on India’s labour market. Economia Politica, 39(1), 101–128. https://doi.org/10.1007/s40888-021-00234-8
• Adams-Prassl, A., Boneva, T., Golin, M., & Rauh, C. (2020). Inequality in the impact of the coronavirus shock: Evidence from real time surveys. Journal of Public Economics, 189, Article 104245. https://doi.org/10.1016/j.jpubeco.2020.104245
• Affandi, Y., Ridhwan, M. M., Trinugroho, I., & Adiwibowo, D. H. (2024). Digital adoption, business performance, and financial literacy in Indonesia's ultra-micro, micro, and small enterprises. Research in International Business and Finance, 70, Article 102376. https://doi.org/10.1016/j.ribaf.2024.102376
• Al Ayyubi, M. S., Pratomo, D. S., & Prasetyia, F. (2023). Does pre-employment card program improve Indonesian youth labor market performance in pandemic era? Cogent Economics & Finance, 11(2), Article 2267752. https://doi.org/10.1080/23322039.2023.2267752
• Albanesi, S., & Kim, J. (2021). Effects of the COVID-19 recession on the US Labor Market: Occupation, family, and gender. Journal of Economic Perspectives, 35(3), 3–24. https://doi.org/10.1257/jep.35.3.3
• Allcott, H., Boxell, L., Conway, J., Gentzkow, M., Thaler, M., & Yang, D. (2020). Polarization and public health: Partisan differences in social distancing during the coronavirus pandemic. Journal of Public Economics, 191, Article 104254. https://doi.org/10.1016/j.jpubeco.2020.104254
• Alon, T., Doepke, M., Olmstead-Rumsey, J., & Tertilt, M. (2020). The impact of COVID-19 on gender equality (Working Paper No. 26947). National Bureau of Economic Research. https://doi.org/10.3386/w26947
• Barro, R. J. (2008). Macroeconomics: A modern approach (Student ed). Thomson/South-Western.
• Bartik, A. W., Bertrand, M., Lin, F., Rothstein, J., & Unrath, M. (2020). Measuring the labor market at the onset of the COVID-19 crisis. Brookings Papers on Economic Activity, 2020(2), 239–268. https://doi.org/10.1353/eca.2020.0004
• Bell, D. N. F., & Blanchflower, D. G. (2020). US and UK labour markets before and during the COVID-19 crash. National Institute Economic Review, 252, R52–R69. https://doi.org/10.1017/nie.2020.14
• BPS-Statistics Indonesia. (2020, November 30). Keadaan angkatan kerja di Indonesia Agustus 2020 [The labor force situation in Indonesia, August 2020]. https://www.bps.go.id/id/publication/2020/11/30/307a288d678f91b9be362021/keadaan-angkatan-kerja-di-indonesia-agustus-2020.html
• Brinca, P., Duarte, J. B., & Faria-e-Castro, M. (2021). Measuring labor supply and demand shocks during COVID-19. European Economic Review, 139, Article 103901. https://doi.org/10.1016/j.euroecorev.2021.103901
• Cahuc, P., Zylberberg, A., McCuaig, W., & Cahuc, P. (2004). Labor economics. MIT Press.
• Carrillo-Tudela, C., Clymo, A., Comunello, C., Jäckle, A., Visschers, L., & Zentler-Munro, D. (2023). Search and reallocation in the COVID-19 pandemic: Evidence from the UK. Labour Economics, 81, Article 102328. https://doi.org/10.1016/j.labeco.2023.102328
• Chatterjee, P., & Dev, A. (2023). Labour market dynamics and worker flows in India: Impact of COVID-19. The Indian Journal of Labour Economics, 66(1), 299–327. https://doi.org/10.1007/s41027-022-00420-7
• Chetty, R., Friedman, J., Hendren, N., Stepner, M., & The Opportunity Insights Team. (2020). How did COVID-19 and stabilization policies affect spending and employment? A new real-time economic tracker based on private sector data (Working Paper No. 27431). National Bureau of Economic Research. https://doi.org/10.3386/w27431
• Cortes, G. M., & Forsythe, E. (2023). Heterogeneous labor market impacts of the COVID-19 pandemic. ILR Review, 76(1), 30–55. https://doi.org/10.1177/00197939221076856
• Coven, J., & Gupta, A. (2020). Disparities in mobility responses to COVID-19. New York University. https://static1.squarespace.com/static/56086d00e4b0fb7874bc2d42/t/5ebf201183c6f016ca3abd91/1589583893816/DemographicCovid.pdf
• Dartanto, T., Susanti, H., Augustin, E., & Fitriani, K. (2023). Reemployment during the COVID-19 pandemic in Indonesia: What kinds of skill sets are needed? Cogent Economics & Finance, 11(2), Article 2210382. https://doi.org/10.1080/23322039.2023.2210382
• Deléchat, C., & Medina, L. (2021). Introduction: What do we know about the informal economy? In C. Deléchat & L. Medina (Eds.), The global informal workforce: Priorities for inclusive growth (pp. 1–9). International Monetary Fund. https://doi.org/10.5089/9781513575919.071
• Dewi, I. G. A. M., Rajiani, I., Riana, I. G., Puspitawati, N. M. D., Muafi, M., & Rihayana, I. G. (2023). Women’s risk-taking behaviour during COVID-19 pandemic: Will work-family enrichment and work satisfaction prevent turnover intention? Administrative Sciences, 13(3), Article 67. https://doi.org/10.3390/admsci13030067
• Doepke, M., & Tertilt, M. (2016). Families in macroeconomics. In J. B. Taylor & H. Uhlig (Eds.), Handbook of Macroeconomics (Vol. 2, pp. 1789–1891). Elsevier. https://doi.org/10.1016/bs.hesmac.2016.04.006
• Dunn, M., Munoz, I., & Sawyer, S. (2021). Gender differences and lost flexibility in online freelancing during the COVID-19 pandemic. Frontiers in Sociology, 6, Article 738024. https://doi.org/10.3389/fsoc.2021.738024
• Eichhorst, W., Marx, P., & Rinne, U. (2020). Manoeuvring through the crisis: Labour market and social policies during the COVID-19 pandemic. Intereconomics, 55(6), 375–380. https://doi.org/10.1007/s10272-020-0937-6
• Elhan‐Kayalar, Y., Sawada, Y., & van der Meulen Rodgers, Y. (2022). Gender, entrepreneurship, and coping with the COVID‐19 pandemic: The case of GoFood merchants in Indonesia. Asia & the Pacific Policy Studies, 9(3), 222–245. https://doi.org/10.1002/app5.362
• Esquivias, M. A., Sethi, N., Ramandha, M. D., & Jayanti, A. D. (2021). Financial inclusion dynamics in Southeast Asia: An empirical investigation on three countries. Business Strategy & Development, 4(2), 203–215. https://doi.org/10.1002/bsd2.139
• Esquivias, M. A., Sugiharti, L., Jayanti, A. D., Purwono, R., & Sethi, N. (2020). Mobile technologies, financial inclusion and inclusive growth in East Indonesia. Journal of Telecommunications and the Digital Economy, 8(2), 123–145. https://doi.org/10.18080/jtde.v8n2.253
• Fazlurrahman, M. H., & Setyowati, R. (2023). Juridical analysis of Government Regulation Number 35 of 2021 regarding massive party officers during the COVID-19 pandemic. International Journal of Social Science and Human Research, 6(1), Article 23. https://doi.org/10.47191/ijsshr/v6-i1-23
• Fiaschi, D., & Tealdi, C. (2023). The attachment of adult women to the Italian labour market in the shadow of COVID-19. Labour Economics, 83, Article 102402. https://doi.org/10.1016/j.labeco.2023.102402
• Forsythe, E., Kahn, L. B., Lange, F., & Wiczer, D. G. (2020). Labor demand in the time of COVID-19: Evidence from vacancy postings and UI claims. Journal of Public Economics, 189, Article 104238. https://doi.org/10.1016/j.jpubeco.2020.104238
• Goolsbee, A., & Syverson, C. (2021). Fear, lockdown, and diversion: Comparing drivers of pandemic economic decline 2020. Journal of Public Economics, 193, Article 104311. https://doi.org/10.1016/j.jpubeco.2020.104311
• International Labour Organization (ILO). (2020, April 29). COVID-19 and the world of work: Updated estimates and analysis (Report No. 27). International Labour Organization. http://www.assiv.it/wp-content/uploads/2020/04/ILO.pdf
• International Labour Organization (ILO). (2021, January 13). Working from home: From invisibility to decent work. https://www.ilo.org/publications/major-publications/working-home-invisibility-decent-work
• Jain, R., Budlender, J., Zizzamia, R., & Bassier, I. (2020). The labor market and poverty impacts of COVID-19 in South Africa. National Income Dynamics Study (NIDS) – Coronavirus Rapid Mobile Survey (CRAM) Wave 2. https://cramsurvey.org/wp-content/uploads/2020/09/8-Jain-R.-Bassier-I.-Budlender-J.-_-Zizzamia-R.-2020-The-labour-market-and-poverty-impacts-of-COVID-19-in-South-Africa-An-update-with-NIDS-CRAM-Wave-2.pdf
• Junaidi, H. (2023). The perishment of the economics sector in women’s domestication during the COVID-19 pandemic in Indonesia. International Journal of Economics and Business Research, 26(4), Article 10058435. https://doi.org/10.1504/IJEBR.2023.10058435
• Kapoor, R. (2020). COVID-19 and the state of India's labour market (ICRIER Policy Series No. 18). Indian Council for Research on International Economic Relations. https://icrier.org/pdf/Policy_Series_18.pdf
• Kartseva, M. A., & Kuznetsova, P. O. (2020). The economic consequences of the coronavirus pandemic: Which groups will suffer more in terms of loss of employment and income? Population and Economics, 4(2), 26–33. https://doi.org/10.3897/popecon.4.e53194
• Khoirunurrofik, K., Abdurrachman, F., & Putri, L. A. M. (2022). Half-hearted policies on mobility restrictions during COVID-19 in Indonesia: A portrait of large informal economy country. Transportation Research Interdisciplinary Perspectives, 13, Article 100517. https://doi.org/10.1016/j.trip.2021.100517
• Kilay, A. L., Simamora, B. H., & Putra, D. P. (2022). The influence of e-payment and e-commerce services on supply chain performance: Implications of open innovation and solutions for the digitalization of Micro, Small, and Medium Enterprises (MSMEs) in Indonesia. Journal of Open Innovation: Technology, Market, and Complexity, 8(3), Article 119. https://doi.org/10.3390/joitmc8030119
• Kurmann, A., Lale, E., & Ta, L. (2020). The impact of COVID-19 on U.S. employment and hours: Real-time estimates with Homebase data. Journal of Public Economics, 189, Article 104238. https://doi.org/10.1016/j.jpubeco.2020.104238
• Kusumawardhani, N., Pramana, R., Saputri, N. S., & Suryadarma, D. (2023). Heterogeneous impact of internet availability on female labor market outcomes in an emerging economy: Evidence from Indonesia. World Development, 164, Article 106182. https://doi.org/10.1016/j.worlddev.2022.106182
• Lee, S., Schmidt-Klau, D., & Verick, S. (2020). The labour market impacts of the COVID-19: A global perspective. The Indian Journal of Labour Economics, 63(S1), 11–15. https://doi.org/10.1007/s41027-020-00249-y
• Lin, Z., & Meissner, C. (2020). Health vs. wealth? Public health policies and the economy during COVID-19 (Working Paper No. 27099). National Bureau of Economic Research. https://doi.org/10.3386/w27099
• Malahayati, M., Masui, T., & Anggreani, L. (2021). An assessment of the short-term impact of COVID-19 on economics and the environment: A case study of Indonesia. EconomiA, 22(3), 291–313. https://doi.org/10.1016/j.econ.2021.12.003
• McNabb, K., Barugahara, T. K., & Kavuma, S. (2023). The dynamics of formal employment during and after the COVID-19 pandemic in Uganda. World Institute for Development Economic Research (UNU-WIDER). https://econpapers.repec.org/paper/unuwpaper/wp-2023-150.htm
• Ministry of Manpower of the Republic of Indonesia. (2022, December). Profil Keselamatan dan Kesehatan Kerja Nasional Indonesia 2022 [The Indonesian National Occupational Safety and Health Profile 2022]. Ministry of Manpower. https://satudata.kemnaker.go.id/publikasi/77
• Miranti, R., Sulistyaningrum, E., & Mulyaningsih, T. (2022). Women’s roles in the Indonesian economy during the COVID-19 pandemic: Understanding the challenges and opportunities. Bulletin of Indonesian Economic Studies, 58(2), 109–139. https://doi.org/10.1080/00074918.2022.2105681
• Mongey, S., Pilossoph, L., & Weinberg, A. (2021). Which workers bear the burden of social distancing? The Journal of Economic Inequality, 19(3), 509–526. https://doi.org/10.1007/s10888-021-09487-6
• Narula, R. (2020). Policy opportunities and challenges from the COVID-19 pandemic for economies with large informal sectors. Journal of International Business Policy, 3(3), 302–310. https://doi.org/10.1057/s42214-020-00059-5
• Nguyen, P., Putra, F., Considine, M., & Sanusi, A. (2023). Activation through welfare conditionality and marketisation in active labour market policies: Evidence from Indonesia. Australian Journal of Public Administration, 82(4), 488–506. https://doi.org/10.1111/1467-8500.12602
• Pitoyo, A. J., Aditya, B., Amri, I., & Rokhim, A. A. (2021). Impacts and strategies behind COVID-19-induced economic crisis: Evidence from informal economy. The Indian Journal of Labour Economics, 64(3), 641–661. https://doi.org/10.1007/s41027-021-00333-x
• Pratomo, D. S., Ningsih, D. N. C., Fahadayna, A. C., Athoillah, M., Arisetyawan, K., & Prastiwi, L. F. (2023). Employment mobility in East Java during the COVID-19 pandemic. Journal of Population and Social Studies, 32, 130–143. https://doi.org/10.25133/JPSSv322024.008
• Program Management Office of the Pre-Employment Card Program. (December 31, 2021). Laporan Manajemen Pelaksana Program Kartu Prakerja Tahun 2021 [Management Report of the Prakerja Card Program]. https://public-prakerja.oss-ap-southeast-5.aliyuncs.com/www/ebook-reporting/Laporan-Manajemen-Pelaksana-Program-Kartu-Prakerja-Tahun-2021-Bahasa.pdf
• Putra, R. A. A., Ovsiannikov, K., & Kotani, K. (2023). COVID-19-associated income loss and job loss: Evidence from Indonesia. Journal of Asian Economics, 87, Article 101631. https://doi.org/10.1016/j.asieco.2023.101631
• Ranchhod, V., & Daniels, R. C. (2020, September). Labour market dynamics in South Africa in the time of COVID-19: Evidence from Waves 1 and 2 of the NIDS-CRAM survey. NIDS-CRAM Working Paper No. 13. Southern Africa Labour and Development Research Unit. https://cramsurvey.org/wp-content/uploads/2020/09/13.-Ranchhod-V.-_-Daniels-R.-2020-Labour-market-dynamics-in-South-Africa-in-the-time-of-COVID-19-Evidence-from-Waves-1-and-2-of-the-NIDS-CRAM-survey.pdf
• Ranchhod, V., & Daniels, R. C. (2021). Labour market dynamics in South Africa at the onset of the COVID‐19 pandemic. South African Journal of Economics, 89(1), 44–62. https://doi.org/10.1111/saje.12283
• Ridhwan, M. M., Suryahadi, A., Rezki, J. F., & Andariesta, D. T. (2023). The impact of COVID-19 on the labour market and the role of E-commerce development in developing countries: Evidence from Indonesia. Journal of the Asia Pacific Economy, 1–44. https://doi.org/10.1080/13547860.2023.2195710
• Rimkute, A., & Sugiharti, L. (2022). The link between occupations, labor force participation of married women, and household technology in Indonesia. Journal of Population and Social Studies, 31, 20–37. https://doi.org/10.25133/JPSSv312023.002
• Rosyadi, S., Sabiq, A., Ahmad, A. A., & Nuryanti. (2022). The Indonesian Government capacity in responding to the COVID-19 impacts on the creative economy sector. SAGE Open, 12(2). https://doi.org/10.1177/21582440221105820
• Schoder, C. (2020). A Keynesian Dynamic Stochastic Disequilibrium model for business cycle analysis. Economic Modelling, 86, 117–132. https://doi.org/10.1016/j.econmod.2019.06.006
• Siregar, R. Y., Gunawan, A. H., & Saputro, A. N. (2021). Impact of the COVID-19 shock on banking and corporate sector vulnerabilities in Indonesia. Bulletin of Indonesian Economic Studies, 57(2), 147–173. https://doi.org/10.1080/00074918.2021.1956397
• Sugiharti, L., Aditina, N., & Esquivias, M. A. (2022). Worker transition across formal and informal sectors: A panel data analysis in Indonesia. Asian Economic and Financial Review, 12(11), 923–937. https://doi.org/10.55493/5002.v12i11.4635
• Sutarto, A. P., Wardaningsih, S., & Putri, W. H. (2022). Factors and challenges influencing work‐related outcomes of the enforced work from home during the COVID‐19 pandemic: Preliminary evidence from Indonesia. Global Business and Organizational Excellence, 41(5), 14–28. https://doi.org/10.1002/joe.22157
• Temenggung, D., Saputro, A., Rinaldi, R., & Pane, D. (2021). Managing recovery and seizing reform opportunities. Bulletin of Indonesian Economic Studies, 57(1), 1–28. https://doi.org/10.1080/00074918.2021.1908207
• Trinugroho, I., Pamungkas, P., Wiwoho, J., Damayanti, S. M., & Pramono, T. (2022). Adoption of digital technologies for micro and small businesses in Indonesia. Finance Research Letters, 45, Article 102156. https://doi.org/10.1016/j.frl.2021.102156
• World Bank Group. (2025, January 7). ILO modelled estimates and projections database (ILOEST). ILOSTAT. https://data.worldbank.org/indicator/SL.UEM.TOTL.ZS