The Family Hope Program (PKH) is a conditional cash transfer program launched by the Government of Indonesia in 2007. Since then its beneficiary coverage has reached 10 million families with the goal of reducing intergenerational poverty. An impact evaluation of the Family Hope program showed that after six years of investment it has significantly improved human capital development. However, it is not a replacement for employment and therefore has not assisted families to become self-sufficient in regards to their livelihoods (Cahyadi et al. 2018; TNP2K, 2015). Existing research to establish the reasons for this outcome has, however, been limited. In response, this research (commissioned by the Australian Government through the MAHKOTA program) seeks to identify the barriers that PKH families face in achieving sustainable livelihoods and the interventions needed to strengthen their economic opportunities.
This research was conducted in four districts in Java, representing different typologies: urban (West Bandung district), semi-urban (Surakarta), rural (Pacitan district) and coastal (Indramayu district). Field data was collected in March 2019 through in-depth interviews and focus group discussions (FGDs) with working-age members (15-59 years of age) within PKH families, government and private sector actors at the subdistrict level; a quantitative survey covering 200 PKH recipient households (539 respondents within PKH families), as well as through secondary data analysis of national surveys and document reviews.
Overall the research revealed a relatively high demand for employment among PKH family members. Although unemployment rates among PKH family members within the workforce were lower than national unemployment levels, about one-fifth are underemployed. Meanwhile, 13 per cent of PKH family members are still in school and will soon enter the workforce.
Most adults of working age in PKH families have relatively low education levels and limited livelihood capital in terms of their access to natural resources, infrastructure, and financial and social capital. Family members who own agriculture businesses and micro, small, and medium enterprises (MSMEs) manage their businesses using simple methods and skills passed down from generation to generation. Over one-third of the workforce engage in the non-agricultural sector but they are vulnerable since most of the companies they work for do not offer employment contracts. Interestingly, those within the 15-30 age bracket have higher education levels and are qualified for jobs as highly skilled workers but are unable to penetrate the formal job market or have high occupational aspirations and are struggling to find the ‘right’ opportunity. Individuals within this age cohort have the potential to transform the household economy.
Few PKH working-age family members receive information or assistance from the various livelihood development programs in their areas, and the PKH-specific livelihood interventions are not leading to substantial economic impacts. It is, therefore, recommended that the Ministry of Social Affairs (MoSA) collaborate with the Ministry of Manpower and the Ministry of Cooperatives and Small and Medium Enterprises (SMEs) at the national and subnational levels to ensure that PKH families are benefiting from available complementary livelihood interventions. A productive inclusion program for PKH families with enterprise capacity could transform their income-earning potential but such assistance should be extended to the PKH family member with strong enterprise capacity and not just to the PKH beneficiary. Lastly, greater efforts to link PKH family members with employers (for those who wish to enter the labour market) or to private sector buyers (for entrepreneurs) would reduce their reliance on middlemen and maximise economic gains.
