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Mobility, scarring and job quality in Indonesia?s labor market

Author

Listed:
  • Naidoo,Darian
  • Packard,Truman G.
  • Auwalin,Ilmiawan

Abstract

This paper investigates the occupational mobility and job quality of young people in Indonesia and relates this to the concept of ?scarring.? The concept of labor market scarring in this paper is the occurrence of low or zero returns to certain types of work (for example, self-employment). Scarring is expected to occur whenever an individual spends periods working in occupations in which their human capital is either stagnant or deteriorating. Fixed effects estimations using panel data from the Indonesian Family Life Survey reveal that a period in self-employment is associated with negative returns for youth (about 3 to 4 percent per year penalty), but not for older adults. In addition, there are clear patterns of persistence in self-employment over time with few individuals progressing from petty self-employment to businesses with permanent workers.

Suggested Citation

  • Naidoo,Darian & Packard,Truman G. & Auwalin,Ilmiawan, 2015. "Mobility, scarring and job quality in Indonesia?s labor market," Policy Research Working Paper Series 7484, The World Bank.
    • Handle: RePEc:wbk:wbrwps:7484
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    Cited by:

    1. Dyah S. Pritadrajati & Anggita C. M. Kusuma & Sweta C. Saxena, 2020. "A Non-Healing Wound: Lasting Consequences Of Unemployment And Informal Self-Employment: An Empirical Evidence From Indonesia," Working Papers WP/09/2020, Bank Indonesia.
    2. Bryn Lampe & Catherine de Fontenay & Jessica Nugent & Patrick Jomini, 2022. "Climbing the Jobs Ladder Slower: Young People in a Weak Labour Market," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 55(1), pages 40-70, March.
    3. Rokhedi Priyo Santoso & Gumilang Aryo Sahadewo & Catur Sugiyanto & Sekar Utami Setiastuti, 2022. "Informal and Formal Wage Differences Based on Cohorts in Indonesia," Economies, MDPI, vol. 10(12), pages 1-13, December.
    4. Pritadrajati, Dyah S. & Kusuma, Anggita C.M. & Saxena, Sweta C., 2021. "Scarred for life: Lasting consequences of unemployment and informal self-employment," Economic Analysis and Policy, Elsevier, vol. 70(C), pages 206-219.

    More about this item

    Keywords

    Labor Markets; Labor Management and Relations; Labor Standards; Youth and Government; Labor Policies;
    All these keywords.

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