Transition of blue-collar workers during the COVID-19 pandemic in Indonesia

Purpose The COVID-19 pandemic caused significant disruptions in Indonesia's labor market and had a disproportionately negative impact on blue-collar workers. This study aims to examine the employment transitions of former blue-collar workers, distinguishing between remaining unemployed or inactive, returning to blue-collar employment, and transitioning into white-collar occupations and the determinants of these transitions during the COVID-19 pandemic period in Indonesia. Design/methodology/approach The study uses multinomial logistic regression to estimate the transition of former blue-collar workers into three possible categories: (1) remaining unemployed or inactive, (2) transitioning back to blue-collar occupations, and (3) transitioning into white-collar occupations. Findings The findings show that the transition of individuals who were formerly employed in blue-collar occupations was dominated by individuals who returned to blue-collar occupations. Age, education level, gender, marital status, training participation, previous employment sector, the digitalization index, economic growth, and the minimum wage significantly affect the transitions of former blue-collar workers. Originality/value This study provides empirical evidence of the dynamics of blue-collar worker transitions during a major economic shock in a developing country context, offering sector-specific insights that inform more targeted and effective labor market policies and recovery strategies.