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View all search resultsJoblessness falls but more work shifts to informal sector
The share of formal employment in Indonesia has been shrinking in recent years even as the official employment rate has come down, which points to deteriorating job quality in the country’s labor market.
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People register for a job fair on May 22, 2025, attended by more than 100 recruiting companies and thousands of jobseekers in Jakarta. (AFP/Bay Ismoyo)
U
nemployment has fallen to the lowest rate in decades, but the share of informal sector work has grown in recent years, pointing to deteriorating job quality in the country’s labor market.
According to Statistics Indonesia (BPS), the unemployment rate dropped to 4.68 percent in February, down 0.08 percentage points from the same period last year, with 7.24 million people out of work, marking a 35,000 decrease year-on-year (yoy).
“The decline in the open unemployment rate in February 2026 was observed among both men and women, as well as in both urban and rural areas,” said BPS head Amalia Adininggar Widyasanti in a virtual press conference on Tuesday.
The data, published twice a year, show unemployment on a downward trend following a massive spike in 2020, during the coronavirus pandemic, with the rate maintained below 5 percent since February 2024.
But this occurs against the backdrop of a growing share of the workforce making a living in the informal sector, where employment often lacks benefits that come with formal jobs.
While the number of formal workers increased to 59.93 million in February from 59.19 million a year earlier, their share of total employment went down by 0.02 percentage points to 40.58 percent, extending an annual decline since 2024.
Arif Novianto, labor researcher and a lecturer at Tidar University, pointed to the growing number of ride-hailing platform partners, couriers and digital freelancers.
