YOUTH EMPLOYMENT REPORT IN INDONESIA. an update

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1 YOUTH EMPLOYMENT REPORT IN INDONESIA an update 1

2 Labour Organization 2004 First published 2004 Publications of the International Labour Office enjoy copyright under Protocol 2 of the Universal Copyright Convention. Nevertheless, short excerpts from them may be reproduced without authorization, on condition that the source is indicated. For rights of reproduction or translation, application should be made to the Publications Bureau (Rights and Permissions), International Labour Office, CH-1211 Geneva 22, Switzerland. The International Labour Office welcomes such applications. Libraries, institutions and other users registered in the United Kingdom with the Copyright Licensing Agency, 90 Tottenham Court Road, London W1T 4LP [Fax: (+44) (0) ; cla@cla.co.uk], in the United States with the Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA [Fax: (+1) (978) ; info@copyright.com] or in other countries with associated Reproduction Rights Organizations, may make photocopies in accordance with the licences issued to them for this purpose. ILO Kantor Perburuhan Internasional, 2004 Laporan Mengenai Tenaga Kerja Muda di Indonesia: data terbaru Judul Bahasa Inggris: Youth Employment Report in Indonesia: an update ISBN The designations employed in ILO publications, which are in conformity with United Nations practice, and the presentation of material therein do not imply the expression of any opinion whatsoever on the part of the International Labour Office concerning the legal status of any country, area or territory or of its authorities, or concerning the delimitation of its frontiers. The responsibility for opinions expressed in signed articles, studies and other contributions rests solely with their authors, and publication does not constitute an endorsement by the International Labour Office of the opinions expressed in them. Reference to names of firms and commercial products and processes does not imply their endorsement by the International Labour Office, and any failure to mention a particular firm, commercial product or process is not a sign of disapproval. ILO publications can be obtained through major booksellers or ILO local offices in many countries, or direct from ILO Publications, International Labour Office, CH-1211 Geneva 22, Switzerland or from the ILO Office in Jakarta, Menara Thamrin, Level 22, Jl. MH Thamrin Kav. 3, Jakarta Catalogues or lists of new publications are available free of charge from the above address, or by pubvente@ilo.org ; jakarta@ilo.org. Visit our website: ; Printed in Jakarta, Indonesia 2

3 Foreword Youth unemployment is one of the most serious issues facing Indonesia today. It is a tragedy for the young women and men concerned and for the nation. It is an enormous waste of the talents and skills of the new generation. There is a need to find new opportunities for decent and productive work for the young people of Indonesia. Without such opportunities, many young people will not be able to realize their potential. To address this challenge, the Government of Indonesia, under the leadership of the Coordinating Ministry of Economic Affairs, volunteered in 2002 to be one of the ten lead countries of the Youth Employment Network. This was followed by the establishment, by Ministerial decree, of the Indonesia Youth Employment Network (I-YEN) and the development of a national Youth Employment Action Plan. The Action Plan was prepared by the I-YEN following consultations with interested persons and groups and was launched by the Vice President of the Republic on International Youth Day, 12 August Some of the key policy recommendations highlighted in the Action Plan include making education affordable for the poor, developing a national skills qualification framework, strengthening the network of vocational education and training centres of excellence and incorporating youth employment goals into macro economic policy. The recommendations also include developing new opportunities in emerging sectors, mobilizing business for action, making it easier for young people to start and run businesses, mobilizing private sector support for young entrepreneurs, and developing linkage support programs between large and small enterprises. Of course it is an important step to develop an Action Plan but that is only the start of the job! More important is the commitment to implementation and willingness to put energy and resources into translating good concepts into practical action. This will require a strong partnership between government, the business community, employers and workers organizations, together with community organizations and others. It also needs the active support and involvement of young people. The present publication has been prepared as part of a technical cooperation project on Addressing the Challenges of Youth Employment in Indonesia (INS/02/50M/NET) which is funded by the Government of the Netherlands. The report aims to raise awareness about youth employment issues in Indonesia and support for programs to address these issues. It updates an earlier report on Youth Employment in Indonesia which was published in That report sought to identify the dimensions of the youth employment challenge in Indonesia and to detail some of the preliminary work undertaken in gaining inputs and support for a national action program on youth employment. 3

4 The new report is the result of collaboration between the ILO and the Institute for Economic and Social Research, Faculty of Economics, University of Indonesia. It is divided into three chapters. The first chapter provides an overview of the current demographic situation of youth in Indonesia, and provides statistics relating to the youth population, education, and employment. The data show the magnitude of the youth employment challenge in Indonesia, including the gender dimension. The second chapter deals with poverty and youth. The ILO involvement in the Poverty Reduction Strategy (PRSP) process in Indonesia has taught us much about the links between youth poverty and the lack of employment opportunities. The report deals with various aspects of youth poverty income, access to basic education and health services, vulnerability and powerlessness. The final chapter of the report examines youth entrepreneurship issues, including the problems young people face in starting and expanding their own businesses. We thank all those involved in the preparation of this report, both from the University of Indonesia and the ILO. We hope that the report will assist the Government of Indonesia, and its partners, in the efforts to create more and better job opportunities for the young people of Indonesia. Alan Boulton Director ILO Jakarta Office October

5 Preface This is the Output-2 (Final Report) of YOUTH EMPLOYMENT REPORT IN INDONESIA, which is conducted by Institute for Economic and Social Research Faculty of Economics University of Indonesia (LPEM FEUI) in corporation with The International Labor Office (ILO). On behalf of Institute for Economic and Social Research Faculty of Economics University of Indonesia and our staff, we would like to appreciate The International Labor Office (ILO), for giving us the opportunity to conduct this study Jakarta, December 2003 Institute for Economic and Social Research Faculty of Economics University of Indonesia (LPEM FEUI) Dr. Muh. Chatib Basri Associate Director for Economics and Policy Research 5

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7 Table of Content Foreword Preface Table of Content List of Table and Figure INTRODUCTION 1 Background 1 Report Content 2 Chapter 1: Overview of the Demographic Situation of Youth in Indonesia 2 Chapter 2: Poverty and Youth 2 Chapter 3: Youth Entrepreneurship 2 CHAPTER 1: OVERVIEW OF THE DEMOGRAPHIC SITUATION OF YOUTH IN INDONESIA 4 Introduction 4 Youth Population 4 Age and Gender 7 Education 10 Ethnic Groups, Residence and Mobility 14 Youth Employment 19 Youth Labor Force Participation Rate 19 Employment to Population Ratio 21 Employment by Status 23 Employment by Field of Work 25 Unemployment 26 Unemployment by Gender 27 Unemployment by Level of Schooling 28 Percentage of Unemployed Youth to Total Unemployment 30 Underemployment 31 Wages and Salary of Youth Employment 34 Social Consequences of Young Unemployment 36 Summary 38 iii v vii ix 7

8 CHAPTER 2: POVERTY AND YOUTH 40 Introduction 40 Overview of Indonesian Poverty Profile 41 Poverty Profile of Young People 46 Education 48 Consumption Pattern 5 Employment by Work Status 5 Employment by Field of Work 5 Conclusion 53 CHAPTER 3: YOUTH ENTREPRENEURSHIP 54 Introduction 54 Profile of Youth Entrepreneurship 55 Rural and Urban 57 Gender 59 Education 60 Self Employment by Field of Work 62 Challenges of Youth Entrepreunership BIBLIOGRAPHY 67 8

9 daftar tabel dan figur Table1.1. Indonesian Population Projection (In Thousands Of People) 5 Table 1.2. Indonesian Youth As Percentage Of Total Population, Table 1.3. Table 1.4. Indonesian Youth As Percentage Of Total Population By Location And Gender, Youth And Adult Labor Force Participation Rate and Unemployment Rate Figure 1.1. Youth Population As Percentage Of Total Population 5 Table 1.5. Percentage Of Indonesian Population By Age Group And Gender Table 1.6. Table 1.7. Percentage Distribution Of Youth Population (15-24 Years) By Educational Attainment Percentage Distribution Of Youth Population (15-24 Years) By Educational Attainment And Gender Figure 1.2. Youth School Enrolment Ratio By Location, Figure 1.3. Youth School Enrolment Ratio By Gender, Table 1.8 Percentage Distribution Of Youth Population (15-24 Years) By Ethnic Group, Figure 1.4. Percentage Of Indonesian Youth Population (15-24 Years) By Location, Figure Growth Rate Of Youth (15-24 Years) Population By Location, Table 1.9 Percentage Of Youth By Migration Status, Table 1.10 Percentage Indonesia Total Population Status By Migration Status, Table 1.11 Percentage Indonesia Inter-regional Lifetime Migration Stream, Figure 1.6. Rural Labor Force Participation Rate By Age Group, Figure 1.7. Urban Labor Force Participation Rate By Age Group, Figure 1.8. Youth (15-24 Year) Labor Force Participation Rate By Gender, Figure 1.9. Youth (15-24 Years) Employment To Population Ratio By Gender,

10 Figure Youth (15-24 Years) Employment To Population Ratio By Location, Figure Youth (15-24 Years) Employment By Status, Figure Percentage Of Adult (Over 25 Years) Employment By Status, Table 1.12 Percentage Of Youth (15-24 Years) Employment By Field Of Work Table 1.13 Percentage Distribution Of Adult (>24 Years) Employment by Field Of Work, Figure Youth (15-24 Years) Unemployment Rate By Location, Figure 1.14 Youth (15-24 Years) Unemployment Rate By Gender, Table 1.14 Percentage Of Youth (15-24 Years) Unemployment Rate By Level Of Schooling, Table 1.15 Percentage Of Adult (>24 Years) Unemployment Rate By Level Of Schooling, Figure Unemployed Youth (15-24 Years) As Percentage Of Total Unemployment (>15 Years), Figure Youth Underemployment As Percentage Of Total Employed By Age Group, Figure Youth Underemployment As Percentage Of Total Employed By Status, Table Youth (15-24 Years) Underemployment As Percentage Of Total Employed By Educational Attainment, Table Percentage Of Youth Employment (15-24 Years) And Adult Employment (>25 Years) By Level Of Monthly Wages/Salaries/Income 5 Figure Percentage Of In-patient Youth For Drugs Abuse Cases By Age Group, Figure 1.19 Percentage Of Additional Prisoners By Age Groups 5 Table Material Lost, Action, Victims Caused By Student Fighting In Jakarta, Table 2.1. Poverty Indicators For Indonesia, Table 2.2. Profile Of The Poor And Non-poor In Indonesia (%), Figure 2.1. Percentage Of Poor People By Age, Table 2.3. Employment Profile Of The Poor And Non-poor In Indonesia (%), Figure 2.2. Average Monthly Expenditure Of Poor And Non-poor, Table 2.4. Percentage Of Poor Young People By Location And Gender, Figure 2.3. Number Of Poor And Non Poor Young People, Figure 2.3. Number Of Poor Young People By Location,

11 Table 2.5. Percentage Of Poor Young People By Location And Education Level, Figure 2.4. Percentage Of Poor Young People By Education Level, Table 2.6. Percentage Of Poor Young People By Work Status And Location, Figure 2.5. Percentage Of Monthly Average Expenditure For Poor Young People, Figure2.6. Employment To Population Ratio For Poor Young People By Location, Table 2.7. Percentage Of Poor Young People By Field Of Work, Table 2.8. Percentage Of Poor Young People By Field Of Work And Location, Figure 3.1. Percentage Of Self-employed Workers, Table 3.1. Percentage Of Worker By Work Status, Table 3.2. Self-employed Workers By Age, Ffigure 3.2. Composition Of Young Self Employed In Rural Area, Figure 3.3. Composition Of Young Self Employed In Urban Area, Figure 3.4. Percentage Of Young Self Employed By Field Of Work, Figure 3.5 Percentage of Young Self Employed by Field of Work, Figure 3.6 Percentage of Young Self Employed by Education, Figure 3.7 Percentage of Young Self Employed by Education and Location, 2002 Table 3.3. Percentage Of Young Self Employed By Field Of Work, Figure 3.8. Percentage of Young Self-Employer by Field of Work and Location,

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13 Introduction Background In general, youth employment and unemployment are highly sensitive to variations in the labor market and overall economic conditions. 1 As such, during times of crisis, like in Indonesia, the youth employment tends to be hardest hit, since they are lacking of adaptive capacity like skills and capital. Strategies for dealing with unemployment must necessarily take into account a process that make certain population groups more vulnerable to unemployment than others. It is important to determine the specific patterns and features of the youth (un)employment situation in Indonesia, relating to these vulnerable groups and developing means and awareness to contain them. The ILO report in 2002 has given a good picture of youth employment situation in Indonesia. The report will be more comprehensive if it is not only covered statistical analysis but also cover policyoriented analysis. The study presented here would update data and intensify the analysis in the report. Moreover, two things could be added to further complement the existing report, which are an analysis of Poverty and Youth and an analysis of Youth Entrepreneurship. This is because of two major government policy initiated in the coming years would relate to the two issues. As such, relating youth employment with the two issues could save resources and give greater impact. 2 Report Content The report will be based on the report of ILO on the Youth and Employment in Indonesia, Basically, the contents would be similar with updated data and issues. The first chapter will elaborate demographic situation youth employment; the second chapter will describe condition of youth and poverty; while the last chapter will present analysis on youth entrepreneurship. Mostly the data used for the analysis would be secondary data from SUSENAS, the census, and other relevant and recent statistical sources such as PODES. The analysis would also include an issue and policy-oriented analysis, with emphasis on employability, youth entrepreneurship, gender equality, and job creation. 1 IOE Programme of Action on Youth Employment, Enhancing Youth Employment: Employers Actions (Draft Programme) Geneva, June The paper by Soeprobo (2002) published by ILO and ILO report on youth employment in Solomon Island (2002) provide a more complete analysis on youth employment. However, as the target group of ILO s report on Indonesia is the government, the items on the report could be shortened so that it could still be readable by the government or general public. 13

14 The contents of the draft report here are still very preliminary and have not comprehensively analysis the data. However, the report has given broad picture on the topic mention above. The topic on youth entrepreneurship has not been covered here, and will be presented in the final report. The detail topics covered in the report are explained as the followings. Chapter 1: Overview of the Demographic Situation of Youth in Indonesia The chapter will update the statistical data and analysis using the most recent available statistical data. The overview will consist of: Youth population (by gender, by education, by location, by ethnic groups, residence and mobility) Youth employment indicators (youth labor force participation rate, employment to population ratio, employment by status, employment by field of work, unemployment by gender, by education, comparison of unemployed youth to total unemployment, and underemployment) Social consequences of youth unemployment Chapter 2: Poverty and Youth The chapter will elaborate the relation of poverty and youth. The scope of analysis in the chapter will include: an outline of multiple forms of youth poverty, such as consumption, income poverty, deficient capabilities (lack of basic education, adequate health, etc), vulnerability (the risk that young people can easily move in and out of poverty), and powerless (the notion that poor young people feel helpless and unable to influence the institutional, social and political circumstances that affect their daily life and their future) a national poverty profile of young people (by gender, by rural/urban location, by income/ consumption, etc) Chapter 3: Youth Entrepreneurship This chapter will estimate the size of young people working as self-employer or in micro enterprises; the profile of youth entrepreneurs; the type of business activities they undertake, and the main challenges young people face to start and expand their business, including access to training, finance, support services, etc. 14

15 Chapter 1 Overview of the Demographic Situation of Youth in Indonesia Introduction In order to fully understand the situation of youth in the Indonesia labor force, this chapter present demographic and employment information. Specific reference is made to youth population statistic, educational and employment issues, migration and the social consequences of youth unemployment. Youth Population Youth in Indonesia, as stated in the State Policy Guidelines ( Garis-garis Besar Haluan Negara ), are the people between the age group years. However, the State Policy Guidelines in Indonesia, sometimes and for different purposes considers the year age group as youth. The age groups often used for youth classification internationally are teenage youth (15-19) and young adults (20-24). The Indonesian population projection by age group is showed in Table 1.1. In absolute number, the largest age group of Indonesian people in the next few years will still be the youth, which consists of teenage youth (15-19) and young adults (20-24). The estimated number in each age group will be around 20 million and 22 million people in The total number is around 20 percent of total population. Table 1.1. Indonesian Population Projection (in thousands of people) Age Group , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

16 , , , , , , , , , , , , , , , , , ,386.3 Total 209, , , , , ,714.7 Sumber: Biro Pusat Statistik The following is the descriptive condition of the Indonesian youth demographic condition. The data used in this study was obtained from the population Census of 1971, 1980, 1990, 2000, Intercensal Population Survey of 1976, 1985, 1995, National Labor Force Survey of 2001 and 2002 and National Social Economic Survey of In the year 2002, youth, the population in the age group years constituted 9.3 percent and the years age group was 8.5 percent of the total population, so the total proportion of youth to total population is around 17.8 percent. The percentage of youth in the age years and years is smaller than in the year 2000 (Table 1.2). Table 1.2. Indonesian Youth as Percentage of Total Population, Period Total Number of Population years as Percentage of Total Population Total Number of Population years as Percentage of Total Population ,325, ,031, ,530, ,882, ,283, ,000, ,566, ,287, ,926, ,128, ,279, ,150, ,149, ,258, ,992,790 9,4 18,036, ,036, ,392, Sources: Indonesia Central Bureau of Statistics: The Population Census of 1971, 1980, 1990, 2000 Intercensal Population Survey of 1975, 1985, 1995; National Labor Forces Survey of 2001, 2002 Table 1.3 shows, in 2002, percentage of male youth who lived in urban areas is 48.2 percent. There has been a rapid increase in the number of male youth population in urban area compared to female youth in the same areas. The increasing proportion of male youth population in urban areas is remarkable, and has more than doubled since 1971, while female youth in urban areas has been decreased around 23 percent during 30 years. In rural areas, the proportion of youth male and female (age years old) since 1971 until 2002 is relatively constant. During the period, the proportion of female is always higher than male, both in urban and rural areas. 16

17 Table 1.3. Indonesian Youth as Percentage of Total Population by Location and Gender, Group Location Gender years Urban Male NA NA Female NA NA Rural Male NA NA Female NA NA years Urban Male s NA NA Female NA NA Rural Male NA NA Female NA NA Total Urban Male (15-24 years) Female Rural Male Female not stated in National Labor Forces Survey of 2001, 2002 Sources: Indonesia Central Bureau of Statistics: Population Census of 1971, 1980, 1990, 2000 Intercensal Population Survey of 1975, 1985, 1995; National Labor Forces Survey of 2001, 2002 In 2000, the labor force participation rate of youth (15-24 years) is smaller than the adult (>25 years). But the unemployment rate of youth is greater than the adult. Because in the age years, most of youth enroll in schooling so they are not a part of labor force (Table 1.4). Tabel 1.4. Tingkat Partisipasi Kelompok Muda dan Dewasa di dalam Angkatan Kerja (%) Period Labor Force Participation Rate Youth (15-24) Adult (>25) Unemployment Rate Labor Force Participation Rate Unemployment Rate Sources: Indonesia Central Bureau of Statistics: 1971, 1980, 1990, 2000 Population Census; 1976, 1985, 1995 Intercensal Population Survey, and 2002 National Labor Force Survey. In order to further explore the Indonesian youth population, the following section describes the age groups, gender conditions, education, ethnic residence and mobility during the past 30 years. Age and Gender For the last 30 years the Indonesia youth population, both teenage youth (15-19 years) and young adults (20-24 years, show an increase in proportion to the total population. As is found in many developing 17

18 countries and characterized by a big proportion being young population (15-24 years). The Indonesian data confirms a youth domination being around 18 percent of the total population. Thus, special attention is deserved because this population is expected to be nation s future in human resources. Below is a graphic presentation of the youth population as a percentage of the total population. Figure 1.1. Youth Population as Percentage of Total Population % Year Sources: Indonesia Central Bureau of Statistics: 1971, 1980, 1990, 2000 Population Census; 1976, 1985, 1995 Intercensal Population Survey, and 2001, 2002 National Labor Force Survey. Over the last 30 years, the Indonesian female youth shows a slightly larger number than male. During , it can be observed from the percentage of population by gender, for all youth age group, that female proportion is always higher than male. But in 2002, the proportion of the female becomes smaller than a year before. The exception applies to the age group that shows a change from female domination in 1971 to 1980 to male domination during (Table 1.5). Table 1.5. Percentage of Indonesian Population by Age Group and Gender Periode Gender Age Total ( > 0 ) years years years 1971 Male Female Male Female Male Female Male Female Male Female Male Female

19 2000 Male Female Male Female Male Female Sources: Indonesia Central Bureau of Statistics: 1971, 1980, 1990, 2000 Population Census; 1976, 1985, 1995 Intercensal Population Survey, and 2001, 2002 National Labor Force Survey. Education In the last three decades, there has been a notable decrease in the percentage of youth (15-24 years) who has never attended school. From 8.3 percent in 1971 to 0.4 percent in 2002 in urban areas and 24.2 percent to 1.5 percent in the rural areas. In urban areas, the decreasing proportion also applies to those with Less than Primary and Primary School education, while in rural areas it only applies to those with Less than Primary education. On other hand, there have been some increases in the percentage of those who attained higher education, that is junior high school and above in urban areas, and primary school and above in rural areas (Table 1.6). Furthermore, the same table indicates differences in the proportion of each level of youth education in urban and rural areas. In 2002, the majority of young people in rural area attained Primary School education (42.8 percent), Junior High School (34.9 percent) and Senior High School (12.6 percent), whereas in urban area, most have attained Junior High School level (39.0 percent), Senior High School (34.9 percent) and Primary School (20.4 percent). During , the proportion of young people who attained a college and university both in rural and in urban areas has changed significantly. In the same time, the proportion of no schooling young people decreases rapidly in urban areas, from 24.2 percent in 1971 to 1.5 percent in Table 1.6. Percentage Distribution of Youth Population (15-24 years) by Educational Attainment Period Location Education Attainment No Less than Primary Junior High Senior High College and Schooling Primary School School School School University 1971 Urban Rural Urban Rural Urban -* Rural -* Urban Rural Urban Rural Urban Rural

20 2000 Urban Rural Urban Rural Urban Rural * The Central Body of Statistics publication of the Population Census 1980 does not contain the data for the category Sources: Indonesia Central Bureau of Statistics: Population Census of 1971, 1980, 1990, 2000 Intercensal Population Survey of 1975, 1985, 1995; National Labor Forces Survey of 2001, 2002 When broken down by gender, youth educational attainment figure shows a tremendous decrease in the proportion of male and female in lower level education (below Primary School) within the last three decades. The male youth education level used to be 14.1 percent for No Schooling and 32.1 percent for less than Primary School in 1971 became 0.9 percent and 5.1 percent in During the same period, female youth lower education levels have decreased from 26.9 percent to 1 percent for those with No Schooling and from 32.9 percent to 5.5 percent for those with Less than Primary School. It seems that female youth population achieved more compared to male counterpart in term of education. The proportion of female youth that completed Junior High School drastically increased around 28.2 percent in last 30 years (7.6 percent in 1971 to 35.8 percent in 2002). The increasing female proportion that completed Senior High School is around 20.1 percent (2.7 percent in 1971 to 22.8 percent in 2002). While for male youth, the proportion that completed Junior High School increased around 25.4 percent (12.6 percent in 1971 to 38.0 percent in 2002) and the proportion that completed Senior High School increased from 5.1 percent in 1971 to 23.9 percent in The figure also shows that in 2002, the percentage of female who attained college and university level of schooling (2 percent) is slightly higher than that of male (1 percent) (Table 1.7). Table 1.7. Percentage Distribution of Youth Population (15-24 years) by Educational Attainment and Gender Period Location Education Attainment No Less than Primary Junior High Senior High College and Schooling Primary School School School School University 1971 Male Female Male Female Male -* Female -* Male Female Male Female Male Female Male Female

21 2001 Male Female Male Female * The Central Body of Statistics publication of the Population Census 1980 does not contain the data for the category Sources: Indonesia Central Bureau of Statistics: Population Census of 1971, 1980, 1990, 2000 Intercensal Population Survey of 1975, 1985, 1995; National Labor Forces Survey of 2001, 2002 Other important aspect in the study of youth education is the youth school enrolment ratio, which is the percentage of youth population attending school by schooling age group. In urban areas, school enrolment ratio of high school age youth (16-18 years) ratio has increased from 40 percent to around 55 percent of its population during 1971 until Although the figure in rural areas is lower (school enrolment ratio did not reach 40 percent), it shows an improvement over 20 years (Figure 1.2). In general, there have been noticeable gaps between rural and urban areas school enrolment ratio both the high school age and the college-university age groups. The gap between the rural and urban is caused by lack of school facilities and low income in rural areas. If people in rural want to reach high school or university degree, they must migrate to urban area, so they must spent more money for tuition fee and living cost. Only rich people in rural, who can get high school or university degree. Figure 1.2. Youth School Enrolment Ratio by Location, ,00 70,00 60,00 % 50,00 40,00 30,00 20,00 10,00 Urban Urban Rural Rural , Year Sources: Indonesia Central Bureau of Statistics: 1971, 1980, 1990, 2000 Population Census; 1976, 1985, 1995 Intercensal Population Survey. In reference to gender issues, it is apparent that there has been a decrease in the gap between male and female school enrolment ratio, which shows that there has been some success in the attempt to equalize male and female education. This significantly reduced gat (between male and female school enrolment ratio) is not reflected in the urban-rural situation, where the school enrolment ratio still shows a substantial gap. 21

22 It has been suggested that the increase in the number of educated female youth could affect decisions whether to actively participate in the economy or not. The potentiality of joining the labor market is also evident in a study by the Indonesian Institute of Science, and which suggests that a possible reason for this phenomena, is the increase in the acceptance of female workers in urban areas (Tirtosudarmo, 1994) On the other hand, the data also indicates that the highest school enrolment ratio of both male and female youth forms only 40 to 50 percent (1985 and 1995 for years age group) (Figure 1.3). The figure for the group age is much lower, never having reached 20 percent over the last 30 years. As youth education tends to equalize in gender, it does not seem to be happening regionally. (urban or rural) Figure 1.3. Youth School Enrolment Ratio by Gender, % Male Male Female Female Year Sources: Indonesia Central Bureau of Statistics: 1971, 1980, 1990, 2000 Population Census; 1976, 1985, 1995 Intercensal Population Survey. Ethnic Groups, Residence and Mobility Table 1.8 shows the information on the language used daily by the youth. From the table, most of youth live in rural areas, although the proportion is decreasing. Simultaneously, the proportion of youth from various ethnic groups who live in urban areas has been increasing as indicated from 1980 to Table 1.8 shows that in 1980 almost 80 percent of Javanese youth lived in rural areas, but in 2000 about 55 percent were living in rural areas. The decreasing Javanese youth population who lived in rural areas is caused by a massive urbanization and transmigration during last two decades. In 1990 and 1995, the Minang ethnic group, (originally from the Western side of Sumatera Island) had the largest proportion (35.8 and 47.5 percent) of native ethnic youth living in urban areas. But in 2000, the Minang ethnic groups are the second largest. In 1980 this figure was only 24 percent. The Minangs, widely known for their culture of mobility, could be found in many regions in Indonesia, and were mostly involved in trade activities. In 2000, Buginese ethnic group and Madurese had the largest 22

23 proportion (60.7 percent and 74 percent) of native ethnic youth living in urban and rural areas. The second largest native ethnic group living in rural areas in 2000 was the Banjarese (around 60 percent). Most of the foreign ethnic, such as Chinese, Arabs and others lived in urban areas. Table 1.8 Percentage Distribution of Youth Population (15-24 years) by Ethnic Group, Ethnic Urban Rural Urban Rural Urban Rural Urban Rural Javanese Sundanese Madurese Batak Minang Balinese Buginese Banjanese Others Foreign Not Stated TOTAL Sources: Indonesia Central Bureau of Statistics: 1980, 1990, 2000 Population Census; -The survey or census doesn t report for the category Intercensal Population Survey 1995 Figure 1.4 illustrates the magnitude and trend of the youth population living in urban and rural areas. It confirms that the trend of youth living in urban areas has been increasing while those living in rural areas have been decreasing. In 1971 youth living in urban and rural areas constituted around 21.5 and 78.5 percent respectively, whilst in 2002 this figure, merged to become relatively close to 50 percent. Its condition is influenced by massive urbanization during two last decades and growth of new city in Indonesia. Figure 1.4. Percentage of Indonesian Youth Population (15-24 years) by Location, % Year Rural Urban Sources: Indonesia Central Bureau of Statistics: 1971, 1980, 1990, 2000 Population Census; 1976, 1985, 1995 Intercensal Population Survey, and 2001, 2002 National Labor Force Survey. 23

24 Figure Growth Rate of Youth (15-24 years) Population by Location, ,00 40,00 % 30,00 20,00 10,00 Urban Rural Urban+Rural 0,00-10, Year Sources: Indonesia Central Bureau of Statistics: 1971, 1980, 1990, 2000 Population Census; 1976, 1985, 1995 Intercensal Population Survey, and 2001, 2002 National Labor Force Survey. Figure 1.5 depicts the growth rate of youth population living in urban and rural areas during 1971 to The growth rate for youth population residing in rural areas has been decreasing and reduced to negative rate in and , while the growth rate for those urban areas has maintained the same decreasing trend. In 2002, the urban growth rate has negative rate. This corresponds with the Indonesian institute of Science findings: during , the growth rate of the years age group in urban areas was around 5 to 7 percent, while in rural areas it was only 1 to 2 percent (Tirtosudarmo, 1994). Migration status is another interesting aspect affecting the young population. Table 1.9 shows the consistently larger proportion of male youth (15-29 years) compared with female youth for lifetime and recent migration categories. The recent migrants are those whose current province is not the same as 5 years ago. Recent non-migrants are people who have lived in the same province 5 years ago. The lifetime migrants are those who the current province is not the one, which they were birthed in, and the lifetime non-migrants are the people living in the same province since their birth. The condition of youth migration tends resemble the general migration condition: the traditional role of male as the breadwinner in the family being the driving force to search for opportunities in different places. It has been frequently asserted that migration is strongly sex-selective. The data shows that the male youth is more mobile than the female (Rogers and Willekens, 1986; Tirtosudarmo, 1994). The percentage of life time migration (around 21 percent), is the higher than that of recent migration (10 percent), which might correlate to youth s status as their parents dependants when the family moved to the new place. 24

25 Table 1.9 Percentage of Youth by Migration Status, years Age Group Male Female M+F Male Female M+F Life time Migration Life time Migrant Non-Life time Migrant Recent Migration Recent Migrant Non-Recent Migrant Sources: Indonesia Central Bureau of Statistics: 1980, 1990 Population Census (as in Tirtosudarmo 1994) Compared to the total population, it seems that the proportion of youth migrants forms a relatively larger percentage than that of the total migrant. In 1980 the proportion of the Indonesian lifetime and recent migrant is 6 percent and 2.5 percent respectively with the condition changing much in The lifetime migration and recent migration became 10 percent and 3.1 percent in The youth dominating condition actually confirms other empirical findings that the rate of migration achieves its peak in the youth age group (Mulder, 1993). In addition, as Todaro (1997) pointed out, urban migrants in developing countries tend to be young men and women between the ages of 15 and 24. Table 1.10 Percentage Indonesia Total Population Status by Migration Status, M+F M+F M+F Life time Migration Life time Migrant Non-Life time Migrant Recent Migration Recent Migrant Non-Recent Migrant Sources: Indonesia Central Bureau of Statistics: 1980, 1990, 2000 Population Census Table 1.11 shows the inter-regional migration (lifetime migration stream) among the island. In 2000, the biggest inter-regional migration occurred between Jawa-Bali and Kalimantan, more than 10 percent population in Kalimantan comes from Jawa-Bali. The second bigger migration occurred between Jawa-Bali and Sumatera. Its around 8 percent population in Sumatera is immigrant from Jawa-Bali. The massive migration is influenced by the transmigration policy during the last 30 years. While, immigrants in Jawa-Bali are dominated by people from Sumatera (around 1.26 percent). Jawa-Bali is most attractive island for immigrant, since Jawa-Bali is the center of Government of Indonesia and center of the economy. Place of Birth Table 1.11 Percentage Indonesia Inter-Regional Lifetime Migration Stream, 2000 Place of Present Residence Sumatera Jawa-Bali Kalimantan Sulawesi Maluku, Papua Nusa Tenggara Sumatera Jawa-Bali Kalimantan

26 Sulawesi Maluku, PapuaNusa Tenggara Not Stated/Foreign Total Sources: Indonesia Central Bureau of Statistics: 2000 Population Census Youth Employment Youth Labor Force Participation Rate Generally, over the last 30 years, the Indonesian youth labor force participation rate has been increasing, both in rural and urban areas, and in all youth age groups. As can be seen in Figure 1.6, in each period more than 40 percent of rural youth and related age groups participated actively in economy. This also applied in urban areas except for teenage youth (15-19 years) whose labor force participation rate comprised about 30 percent (Figure 1.7). These facts should be of significant concern, for when they are expected to stay in school, those teenagers have already been working or looking for work. The difference of labor force participation rate between rural and urban teenage youth (the formers being beginner) is supposed to correspond with the difference in the rural and urban school enrolment ratio. It seems that the explanation for lower labor force participation rate of urban teenage youth is their staying-in-school status. The older age group (25-29 years) in Figure 1. 6 and 7 show a higher rate compared with the younger age group, (for both rural and urban areas) whilst the age group is between the two. In 2000, these age groups reached a magnitude of around 70 percent of participation in the economy, both in urban and rural areas. Figure 1.6. Rural Labor Force Participation Rate by Age Group, % Year Sources: Indonesia Central Bureau of Statistics: 1971, 1980, 1990, 2000 Population Census; 1976, 1985, 1995 Intercensal Population Survey, and 2001, 2002 National Labor Force Survey 26

27 Figure 1.7. Urban Labor Force Participation Rate by Age Group, % Year Sources: Indonesia Central Bureau of Statistics: 1971, 1980, 1990, 2000 Population Census; 1976, 1985, 1995 Intercensal Population Survey, and 2001, 2002 National Labor Force Survey. From a gender perspective it is evident that male youth continue to dominate the youth labor force. Figure 1.8 shows that male youth who were working or looking for work formed around 60 percent of labor force during , while it was only around 30 to 40 percent for female. However, the gap is diminishing for each period, as a result of the increase of female participation in the economy. More and more female youth are working or looking for work, instead of undertaking traditional activities such as housekeeping and child rearing. Education could be one possible explanation for this. Figure 1.8. Youth (15-24 year) Labor Force Participation Rate by Gender, ,00 70,00 60,00 % 50,00 40,00 30,00 Male Female 20,00 10,00 0, Year Sources: Indonesia Central Bureau of Statistics: 1971, 1980, 1990, 2000 Population Census; 1976, 1985, 1995 Intercensal Population Survey, and 2001, 2002 National Labor Force Survey. 27

28 Employment to Population Ratio Employment to population ratio may indicate the employability of a potentially productive population. For youth, the ratio is develop through a comparison of all employed youth (15-24) to the total number of respective age groups of the population. As in Puguh et.al. (2000), the ratio indicates the extent to which the population is involved in labor market activities. The result indicates that around 50 per-cent of male youth were employed during the period of study, while there were only about 30 per-cent of female youth employed. There is a tendency of decrease in terms of the gap of male and female youth employment to population ratio during the last five years. As observed in Figure 1.9, the ratios for male and female are relatively constant, not having changed drastically in the last two decades. This constant employment ratio to population ratio of youth age groups could reflect the demand for youth labor in the market. But as the youth labor force participation in the work world continues to expand, this situation might explain the growing portion of those who are looking for work. Lack of education and experience could be reason for that situation. In 2000 the gap between male and female is so close, but in 2001 and 2002 the gap becomes larger than Figure 1.9. Youth (15-24 years) Employment to Population Ratio by Gender, ,00 70,00 60,00 % 50,00 40,00 30,00 20,00 10,00 0, Year Male Female Sources: Indonesia Central Bureau of Statistics: 1971, 1980, 1990, 2000 Population Census; 1976, 1985, 1995 Intercensal Population Survey, and 2001, 2002 National Labor Force Survey. The youth employment to the population ratio by Location, as observed in Figure 1. 10, also shows a relatively stable trend for last twenty years. The ratio for rural, which comprises 50 per-cent, surpassed that for urban by 10 to 20 percent. In 2001 and 2002, the gap between rural and urban areas becomes smaller. 28

29 Figure Youth (15-24 years) Employment to Population Ratio by Location, ,00 60,00 50,00 % 40,00 30,00 20,00 10,00 Rural Urban 0, Year Sources: Indonesia Central Bureau of Statistics: 1971, 1980, 1990, 2000 Population Census; 1976, 1985, 1995 Intercensal Population Survey, and 2001, 2002 National Labor Forces Survey. Employment by Status The proportion of young people working in the informal sector for the last 30 years shows a continuing dominance that in the formal sector. Generally the main characteristics of formal sectors are that they require more education, skills, training and experience for the jobs: skill that youth have least, as compared to adult labor force age groups. According to the definition used by The Indonesian Central Bureau of Statistics, employment in the informal sector covers self-employed, self-employed assisted by family workers, freelance workers, and family workers. While its counter part (employment in formal sector), consists of employers and paid employees. Although the proportion of youth working in the informal sector continuously surpasses those formal sector, the gap between them has been decreasing as more and more youth gain the opportunity to work in formal sector. In 1971 more than 80 percent of youth workers were found in the informal sectors, whereas it was close to percent in In the formal sector, there were 16 percent and percent in 1971 and 2002 respectively (Figure 1.11). 29