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The Formal Sector as a Driver of Jakarta’s Labor Absorbtion

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Release Date	:	November 5, 2021
File Size	:	1.27 MB

Abstract

In August 2021, the formal sector was the primary source of labor absorption in Jakarta. Three new employees out of every five joined the formal sector. This trend is being fueled by an increase in the absorption of well-educated labors.

This labor absorption occurs as a result of the decline of 32 thousand unemployed in August 2020 and the inclusion of 14 thousand new employees. In comparison, the informal sector employs just 10 thousand people and created 22 thousand new jobs.

Overall, this condition results in a reduction of 133 thousand unemployed persons, decreasing the capital’s unemployment rate by 2.45 percentage points to 8.50 percent in August 2021. In comparison to other provinces in Indonesia, Jakarta’s unemployment rate has reduced the most.

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