As women tend to work with limited capacity, skills or funding, they stand a little chance of advancing in their careers or business.
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Informality 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.
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