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Exports and Job Creation in Indonesia Before and After the Asian Financial Crisis

Author

Listed:
  • Haryo Aswicahyono
  • Chris Manning

Abstract

Employment generation has been a challenge in Indonesia since the Asian Financial Crisis (AFC), especially in labor-intensive manufacturing. We examine the direct and indirect impact of exports on jobs, based on an analysis of input-output tables over the period 1985-2005, and compare these findings with the earlier pre-crisis period. The paper finds that fewer jobs were created through exports in manufacturing industries in after the AFC, because of slower growth in manufacturing exports and a shift away from light industry. However, there was an increase in service sector jobs, partly because of linkages with the main export industries in manufacturing and primary industry. Besides intensified competition from other lower-middle income Asian economies, the main constraints to job creation through exports appear to have been on the supply side; these include too poor infrastructure, an uncertain investment climate and tight labor regulations.

Suggested Citation

  • Haryo Aswicahyono & Chris Manning, 2011. "Exports and Job Creation in Indonesia Before and After the Asian Financial Crisis," Departmental Working Papers 2011-11, The Australian National University, Arndt-Corden Department of Economics.
    • Handle: RePEc:pas:papers:2011-11
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    File URL: https://crawford.anu.edu.au/acde/publications/publish/papers/wp2011/wp_econ_2011_11.pdf
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    References listed on IDEAS

    as
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    12. Prema-chandra Athukorala & Bambang Santosa, 1997. "Gains from Indonesian Export Growth: Do Linkages Matter?," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 33(2), pages 73-95.
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    Cited by:

    1. Reda Cherif & Fuad Hasanov, 2014. "Soaring of the Gulf Falcons: Diversification in the GCC Oil Exporters in Seven Propositions," IMF Working Papers 2014/177, International Monetary Fund.

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    More about this item

    Keywords

    exports; employment creation; manufacturing growth; input-output analysis; Indonesia; Southeast Asia;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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