Structural Transformation and the Release of Labor from Agriculture

Coordinator:
Team Member: Joseph Natanael Marshan, Veto Tyas Indrio
Completion Year:
2017
Area:
Indonesia
Topic:
Labor, Migration & Informal Sector, Rural Development & Agriculture

Collaborating Partners

Funding Body :

The Asian Development Bank 

 
 

Description & Progress

Description

This project will be a book chapter for an employment diagnostic study conducted by the ADB. This study examines the issues of improving employment outcomes and labor dynamics in Indonesia. It uses IFLS to understand structural transformation in Indonesia, focusing on the flow out from rural farm activities, and potential policies to speed up the process. 

The study consists of two major sections. The first part focuses on analyzing the employment transition of individuals over around 17 years of their lifetime. The second section focuses on understanding the pull and push factors of moving away from agricultural activities using a shorter period dataset (2007-2014).

 

Research Findings

From the first part of the study we find that older and less educated individuals are less likely to move out of the agricultural sector.

The second part of the study suggests that besides better education attainment, agricultural policies such as its mechanization, effectively push individuals away from rural farm activities. On a broader scale, the whole employment diagnostic study is aimed at refining and improving Indonesia’s labor policies to support better and more equal economic growth.