The labour market in Indonesia, 2001-2024

Indonesia’s labour market absorbed over 50 million additional workers between 2001 and 2024, while unemployment fell from 8% to under 5%. Yet job quality has not kept pace. Structural transformation, the movement of workers out of agriculture, has largely bypassed manufacturing and channeled labour into low-value-added services; 58% of workers remain informal; median earnings stand roughly 40% below the average minimum wage, even though more than a quarter of the workforce works over 48 hours per week; and female labour force participation trails male participation by 28 percentage points. These four interconnected features define Indonesia’s labour market challenge.