Description
People have speculated about the possible affect of new, quite tight labour regulations on jobs in the early years of reformasi. One hypothesis is that firms would be reluctant to fire labour, and would also cut back on new hires: young people would be disproportionately affected. An alternative proposition stresses a possible shift to more casual employment contracts, as firms dodged the more onerous elements of the legislation. I attempt a preliminary examination of these two hypotheses, looking at labour force and employment data over the period 2001-2009. The first hypothesis seems to be confirmed for the first half of the decade but not the second. From 2001-2006, Indonesia’s unemployment rate rose sharply, especially among females and youth, suggesting ‘jobless growth’. More recently, however, and employment has picked up and unemployment rates fallen. Significant gains were registered by casual workers, especially among females in manufacturing. Many firms seem to have got around the restrictive legislation, providing for greater flexibility. However there may be damaging effects for human capital, income distribution, and gender equity.

Presenter
Chris Manning is an Associate Professor in the Arndt-Corden Department of Economics in the Crawford School, at the Australian National University (ANU). He has a Phd in economics from the ANU and Masters degree from Monash University. He was Head of the Indonesia Project at the ANU from 1998-2010 and has worked at Flinders University in South Australia, and Gadjah Mada University in Yogyakarta, Indonesia, and for shorter periods with USAID and the Agricultural Research Institute in Bogor. He is author of over 30 refereed journal articles and 30 book chapters, as well as several books, research monographs, edited volumes and consultancy reports. His most important publications are Indonesian Labour in Transition: An East Asian Success Story? (Cambridge, 1998) and Structural Change and International Migration in East Asia (Oxford, 1999, co-authored with Prema-Chandra Athukorala). His specialist academic interests are in labour economics, labour policy and international migration related to economic growth and poverty alleviation in Southeast Asia, and particularly Indonesia. Recently he has co-edited two books, the first on rural-urban migration in China and Indonesia with Xin Meng (The Great Migration, Edward Elgar 2010) and the second with Sudarno Sumarto entitled Employment, Living Standards and Poverty in Contemporary Indonesia (ISEAS, 2011, forthcoming).