The Jakarta Post
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Popular Reads
Top Results
No results found. Please check your search term and try again
Can't find what you're looking for?
View all search results
Popular Reads
Top Results
No results found. Please check your search term and try again
Can't find what you're looking for?
View all search resultsStepping out of the long shadow of the economy
As women tend to work with limited capacity, skills or funding, they stand a little chance of advancing in their careers or business.
Change text size
Gift Premium Articles
to Anyone
Share the best of The Jakarta Post with friends, family, or colleagues. As a subscriber, you can gift 3 to 5 articles each month that anyone can read—no subscription needed!
Set as preferred source
I
nformality in the economy increases during crises, including in Indonesia when the pandemic struck in 2020. These so-called hidden economies, however, are associated with limited skills, low productivity, a high incidence of poverty and a decent work shortage. And in most emerging markets like Indonesia informal jobs are more prevalent among women.
As global uncertainty persists with an elevated risk of economic downturn, a pervasive shadow economy haunts inclusive recovery, calling for a policy package to address the complexity of informality that encourages a transition from a shadow to a licit economy.
There is a widely accepted notion that women are the backbone of Indonesia's economy. This is due to the fact that women dominate the micro, small and medium-sized enterprises (MSMEs), which account for around 62 percent of GDP, or about Rp 8.6 trillion (US$580 billion) and absorb about 90 percent of total workforce. More than half of the 64 million SMEs in Indonesia are women-owned businesses, but most of them are in the micro and small sector and operate informally.
In 2020, informal workers accounted for 60.47 percent of the labor market, up by 5 percent from 55.72 percent in 2019. During this period, the share of women in the informal sector surged from 41.97 percent to 57.35 percent. From self-employed workers in MSMEs such as market vendors and hawkers, to wageworkers like domestic workers and home-based workers, women were overrepresented in informal labor.
Given the persistently low female participation in the workforce -- at around 54 percent or significantly below that of their opposite gender at more than 80 percent -- data indicate that informal employment is more common among female workers. This is in line with the findings of the International Labor Organization (ILO) and Women in Informal Employment: Globalizing and Organizing (WIEGO), which show that women are more likely than men to work in the informal economy.
ILO defines the informal economy as all economic activities by workers and businesses insufficiently covered by formal arrangements. Consequently, the law is not applied or enforced on the activities operated by informal workers, limiting their access to legal rights and adequate social protection.
Although Indonesia has provided universal health coverage, including for informal workers through the non-employee scheme (BPU), the enrolment has been scanty. According to data from the Workers Social Security Agency (BPJS Ketenagakerjaan) in 2021, there were only 3.55 million or less than 5 percent of the workforce registered workers in the national healthcare security program.
