Analysis of Formal and Informal Sector in Indonesia During the Covid-19 Pandemic
Abstract
Indonesia’s informal sector, which before the covid-19 pandemic was already large, became bigger with the community's economy being devastated after the covid-19 pandemic. The objective of this research was to analyse the employment of formal and informal sector during the covid-19 pandemic. The methodology of the research using quantitative analysis using descriptive. Secondary data was used from National Employment Statistic (Sakernas) from year 2018 – 2022. The analysis were investigating the formal sector and informal sector workforce figures and the growth after covid-19 pandemic, examining the formal sector based on gender assessing the growth of informal sector for non-agriculture sector. The results of descriptive analysis found that the informal sector in urban and rural areas has experienced a surge in increase compared to before the pandemic. Informal sector entrepreneurs who do business with the help of temporary or unpaid workers have decreased. The formal sector based on gender shows a decrease in the number of female workers compared to before the pandemic which indicates that female workers were more vulnerable to being laid off during a crisis. The highest proportion of non-agricultural informal sector workers was at the elementary school level. Based on urban and rural residences for the non-agricultural informal sector, urban informal sectors experienced a higher increase before and after the pandemic compared to rural areas. Based on age group, the 15 to 19-year-old group experienced the highest growth on the non-agricultural informal sector
References
Asian Development Bank, and BPS-Statistics. (2011). The Informal Sector and Informal Employment in Indonesia. www.adb.org
Bonnet F, Joann K, Martha C. 2019. Women and Men in the Informal Economy: A Statistical Picture. ILO Geneva. www.wiego.org.[3] BPS. (2022). Dynamic Table of Labor Subjects. https://www.bps.go.id/subject/6/tenaga-kerja.html#subjekViewTab5
BPS. (2017). SDG’S INDICATOR METADATA.
Chaudhuri, Sarbajit, and Ujjaini Mukhopadhyay. (2010). Revisiting the Informal Sector. Revisiting the Informal Sector. https://doi.org/10.1007/978-1-4419-1194-0.
Cole, W.E. and Sanders, R.D. (1983). ‘Interstate Migration in Mexico: Variations on the Todaro Theme’, Journal of Development Economics, 12, pp. 341–354.
CNBC Indonesia. (2022). Indonesia’s Wave of Layoffs Is Getting More Crowded, What Are The Signs? https://www.cnbcindonesia.com/market/20221118161847-17-389356/gelombang-phk-ri-semakin-ramai-pertanda-apa
DetikNews. (2021). “Caring for the Post-pandemic Informal Sector”. https://news.detik.com/kolom/d-5731506/merawat-sektor-informal-pascapandemi.
Fei, J.C.H. and Ranis, G. (1964). Development of the Labour Surplus Economy: Theory and Policy. Richard A. Irwin, Inc., Homewood, IL.
Fields, G.S. (1990). ‘Labour Market Modeling and the Urban Informal Sector: Theory and Evidence’, in Turnham, D., Salomé, B. and Schwarz, A. (eds.), The Informal Sector Revisited.
Development Centre of the Organisation for Economic Co-Operation and Development, Paris
Harris, J.R. and Todaro, M.P. (1970). ‘Migration, Unemployment and Development: A Theoretical Analysis’, American Economic Review, 60, pp.126–142.
Khuong, Nguyen Vinh, Malik Shahzad Shabbir, Muhammad Safdar Sial, and Thai Hong Thuy Khanh. 2021. “Does Informal Economy Impede Economic Growth? Evidence from an Emerging Economy.” Journal of Sustainable Finance and Investment 11 (2): 103–22. https://doi.org/10.1080/20430795.2020.1711501.
Lewis, A. (1954). ‘Economic Development with Unlimited Supply of Labour’, Manchester School, 22, pp. 139–191. Reprinted in A.N. Agarwal and S.P. Singh (eds.) Economics of Underdevelopment (1958), Oxford University Press.
Webb, Aleksandra, Ronald McQuaid, and Sigrid Rand. 2020. “Employment in the Informal Economy: Implications of the COVID-19 Pandemic.” International Journal of Sociology and Social Policy 40 (9–10): 1005–19. https://doi.org/10.1108/IJSSP-08-2020-0371.
