The Impact of the Open Unemployment Rate on the Poverty Rate in Indonesia from 2014 to 2023

Niaga Gozali, Julia Nurikmah, Disman Disman

Abstract


This study aims to analyze the impact of the open unemployment rate on the poverty rate in Indonesia over the period 2014–2023. Utilizing a qualitative approach and literature review method, the research identifies a strong correlation between open unemployment and poverty, along with other contributing factors. The findings indicate that an increase in the open unemployment rate significantly contributes to the rise in the number of people living in poverty. Furthermore, this study provides insights for the government and relevant stakeholders in formulating more effective policies to reduce both unemployment and poverty, thereby supporting the achievement of the Sustainable Development Goals (SDGs) in Indonesia. It is expected that these findings will serve as a foundation for further research and the development of more inclusive and sustainable policy measures.


Keywords


Economic Policy, Human Capital Development, Labor Market Dynamics, Open Unemployment Rate, Poverty Rate

Full Text:

PDF

References


Abdullah, D., Zabidi, N., Zulzamzuri, D., Bakar, A., Tumin, S., & Zaeimoedin, T. (2024). Unpacking the inflation basket: A systematic literature review of key determinants of rising food prices and their global impact. International Journal of Research and Innovation in Social Science. https://doi.org/10.47772/ijriss.2024.809063

Aini, Y., Sacipto, R., Wahyono, E., & Handitya, B. (2024). Urbanization and equitable welfare for migrants: Analysing disparities and local potential in Blora Regency, Indonesia. Environment and Urbanization ASIA. https://doi.org/10.1177/09754253241281948

Alm, S., Nelson, K., & Nieuwenhuis, R. (2020). The diminishing power of one? Welfare state retrenchment and rising poverty of single-adult households in Sweden 1988–2011. European Sociological Review. https://doi.org/10.1093/esr/jcz053

Asian Development Bank. (2021). Key indicators for Asia and the Pacific. https://www.adb.org/publications/key-indicators-2021

Badan Pusat Statistik (BPS). (2022). Poverty Statistics in Indonesia. Jakarta: Badan Pusat Statistik.

Badan Pusat Statistik (BPS). (2022). Labor Force Statistics of Indonesia. Jakarta: Badan Pusat Statistik.

Badan Pusat Statistik (BPS). (2021). Poverty and Unemployment Statistics. Jakarta: Badan Pusat Statistik.

Bassier, I., Budlender, J., Zizzamia, R., Leibbrandt, M., & Ranchhod, V. (2021). Locked down and locked out: Repurposing social assistance as emergency relief to informal workers. World Development. https://doi.org/10.1016/j.worlddev.2020.105271

Bayır, M. (2021). The impact of global economy and global liquidity on domestic economic growth. In Title of book or edited volume if available (pp. 337–355). https://doi.org/10.4018/978-1-7998-4459-4.ch019

Bogari, A. (2024). Economic uncertainty and monetary policy effectiveness: A comparative study between high and low uncertainty countries. Journal of Ecohumanism. https://doi.org/10.62754/joe.v3i7.4389

Brunt, L., & García-Peñalosa, C. (2021). Urbanisation and the onset of modern economic growth. The Economic Journal. https://doi.org/10.1093/ej/ueab050

Carr, S., Maleka, M., Meyer, I., Barry, M., Haar, J., Parker, J., Arrowsmith, J., Yao, C., Hodgetts, D., Jones, H., Young-Hausner, A., Afeaki-Mafile’o, E., Rasmussen, A., Alefaio-Tugia, S., Falealili, B., Mafile’o, K., Pikula, T., Wolfgramm, N., ‘Uhila, H., Falealili, Y., Grueber, A., Berlim, L., Hausia, E., Ntsweng, M., Koza, J., Groothof, D., Schie, S., Lyckholm, I., & Naithani, A. (2018). How can wages sustain a living? By getting ahead of the curve. Sustainability Science, 13(3), 901–917. https://doi.org/10.1007/s11625-018-0560-7

Cortes, G., & Forsythe, E. (2020). Heterogeneous labor market impacts of the COVID-19 pandemic. Industrial & Labor Relations Review, 76(1), 30–55. https://doi.org/10.1177/00197939221076856

De Vita, G., Li, C., & Luo, Y. (2021). The inward FDI–energy intensity nexus in OECD countries: A sectoral R&D threshold analysis. Journal of Environmental Management, 287, 112290. https://doi.org/10.1016/j.jenvman.2021.112290

Dev, S. (2018). Labour market inequalities in India: Dimensions and policies. Indian Journal of Human Development, 12(2), 217–235. https://doi.org/10.1177/0973703018791386

Din, N., Zaman, K., Ashraf, S., Sajjad, F., Saleem, S., & Raja, U. (2014). Quality versus quantity in health care and educational reforms: Combating poverty. Quality & Quantity, 49(1), 267–293. https://doi.org/10.1007/s11135-013-9986-2

Eydam, U., & Leupold, F. (2024). What is it good for? On the inflationary effects of military conflicts. International Economics. https://doi.org/10.1016/j.inteco.2024.100535

General Statistics Office of Vietnam. (2023). Statistical yearbook 2023. GSO Vietnam.

Giap, T., Gopalan, S., & Ahmad, N. (2018). Growth slowdown analysis for Indonesia’s subnational economies: An empirical investigation. Review of Pacific Basin Financial Markets and Policies. https://doi.org/10.1142/S0219091518500170

Goh, L., Trinugroho, I., Law, S., & Rusdi, D. (2024). Institutional quality, FDI inflows, human capital development and poverty: A case of Indonesia. International Journal of Social Economics. https://doi.org/10.1108/ijse-09-2023-0733

Guerra, S., Roope, L., & Tsiachristas, A. (2024). Assessing the relationship between coverage of essential health services and poverty levels in low- and middle-income countries. Health Policy and Planning, 39(2), 156–167. https://doi.org/10.1093/heapol/czae002

Gustriansyah, R., Alie, J., & Suhandi, N. (2022). Modeling the number of unemployed in South Sumatra Province using the exponential smoothing methods. Quality & Quantity, 57(5), 1725–1737. https://doi.org/10.1007/s11135-022-01445-2

Hakam, L. I., & Hanri, M. (2021). The effect of access to financial assistance on the mental health of college students during the Covid-19 pandemic. Journal of Research in Business, Economics, and Education, 3(6), 78–93.

Harris, D., Chen, F., Martin, R., Bernhardt, A., Marsicano, C., & Von Hippel, P. (2024). The effects of the COVID-19 pandemic on educational attainment. RSF: The Russell Sage Foundation Journal of the Social Sciences, 10(1), 152–180. https://doi.org/10.7758/RSF.2024.10.1.07

Harry, M., Zein, M., Denay, H., & Septiani, S. (2023). Local Government Strategies to Reduce Unemployment. International Journal of Business Economics (IJBE). https://doi.org/10.30596/ijbe.v5i1.16182.

Hill, H. (2021). What’s happened to poverty and inequality in Indonesia over half a century? Asian Development Review. https://doi.org/10.1162/ADEV_A_00158

International Labour Organization. (2020). World employment and social outlook: Trends 2020. Geneva, Switzerland: International Labour Organization. https://www.ilo.org/global/research/global-reports/weso/2020/WCMS_734455/lang--en/index.htm

Iyunade, O. (2024). Implementation of skills-based vocational education programmes for youths empowerment and community development in Ogun State, Nigeria. Journal of Education in Black Sea Region. https://doi.org/10.31578/jebs.v9i2.317

Jabatan Perangkaan Malaysia. (2023). Poverty statistics report 2023. Jabatan Perangkaan Malaysia.

Kementerian Ketenagakerjaan Republik Indonesia. (2021). Report on the labor placement and protection system. Kementerian Ketenagakerjaan Republik Indonesia.

Kementerian Sosial Republik Indonesia. (2020). Poverty alleviation report. Kementerian Sosial Republik Indonesia.

Kementerian Sosial Republik Indonesia. (2020). Family Hope Program report. Kementerian Sosial Republik Indonesia.

Lewis, O. (2023). Infrastructure investment and job creation under the U.S. 2021 economic stimulus plan. International Journal of Social Science and Research. https://doi.org/10.58531/ijssr/1/2/8

Lu, C. (2019). Optimal government policies related to unemployment. Public Finance Review, 47(1), 111–187. https://doi.org/10.1177/1091142117712858

Marpaung, R., Sintia, I., & Rahayu, F. (2023). Analysis of the effect of open unemployment rate and human development index on poverty in North Sumatra Province. Indonesian Journal of Advanced Research. https://doi.org/10.55927/ijar.v2i5.4141

Masur, J., & Posner, E. (2011). Regulation, unemployment, and cost-benefit analysis. https://doi.org/10.2139/ssrn.1920441

Mohapatra, B., & Sahoo, C. (2025). Contributory social security and employment-based social protection for informal workers: moderating role of regulatory framework. International Journal of Manpower. https://doi.org/10.1108/ijm-06-2024-0383.

Muh, M., & Munir, S. (2023). Integration of Social Regulations and Zakat Management Regulations as National Efforts to Alleviate Poverty. ZISWAF: JURNAL ZAKAT DAN WAKAF. https://doi.org/10.21043/ziswaf.v10i1.22170.

National Statistical Office of Thailand. (2023). Poverty statistics 2023. NSO Thailand.

Nugroho, A., Amir, H., Maududy, I., & Marlina, I. (2021). Poverty eradication programs in Indonesia: Progress, challenges and reforms. Journal of Policy Modeling. https://doi.org/10.1016/j.jpolmod.2021.05.002.

OECD. (2022). Skills outlook 2022: The importance of skills in the post-COVID world. Organisation for Economic Co-operation and Development.Rambe, R., Purmini, P.,

Alfansi, L., Armelly, A., & Yusnida, Y. (2023). Examining the roles of labor factors, investment, and industrialization in poverty alleviation: Empirical evidence from Sumatra, Indonesia. Poverty & Public Policy. https://doi.org/10.1002/pop4.385.

Sari, S., Dwiputri, I., ‎, W., & Parhah, S. (2024). Variables Affecting Young Unemployment in Indonesia. KnE Social Sciences. https://doi.org/10.18502/kss.v9i21.16758.

Sen, A. (1999). Development as freedom. Knopf.

Singh, S., & Jha, C. (2023). Are financial development and financial stability complements or substitutes in poverty reduction?. The European Journal of Finance, 29, 2001 - 2031. https://doi.org/10.1080/1351847X.2023.2166864.

Solaymani, S. (2017). Agriculture and Poverty Responses to High Agricultural Commodity Prices. Agricultural Research, 6, 195-206. https://doi.org/10.1007/s40003-017-0253-y.

Stephens, M. (2003). Job Loss Expectations, Realizations, and Household Consumption Behavior. Review of Economics and Statistics, 86, 253-269. https://doi.org/10.1162/003465304323023796.

Thanga, J., & Lalremsanga, J. (2021). Deprivations of the urban poor in multidimensional context in the North Eastern Indian state of Mizoram. EPRA International Journal of Research and Development (IJRD), 6(9), 436–441. https://doi.org/10.36713/EPRA6882

Law of the Republic of Indonesia No. 13 of 2011 concerning Poverty Alleviation. (2011). State Secretariat.

Law of the Republic of Indonesia No. 2 of 2003 concerning the Placement and Protection of Workers. (2003). State Secretariat.

UNDP. (2021). Human development report 2021/2022: Uncertain times, unsettled lives. United Nations Development Programme. https://hdr.undp.org

Van Leeuwen, B., & Földvári, P. (2016). The development of inequality and poverty in Indonesia, 1932–2008. Bulletin of Indonesian Economic Studies, 52(3), 379–402. https://doi.org/10.1080/00074918.2016.1184226

Webber, D. (1985). Review of The politics of unemployment, by Baumer, D. C., & Horn, C. E. Van. American Political Science Review, 79(4), 1180–1181. https://doi.org/10.2307/1956256

World Bank. (2019). Indonesia’s social protection system: A review of the current situation and future directions. World Bank.

World Bank. (2021). Indonesia economic prospects: Navigating the pandemic. World Bank.




DOI: https://doi.org/10.17509/jpei.v7i1.78162

Refbacks

  • There are currently no refbacks.


Copyright (c) 2025 Niaga Gozali

Creative Commons License

Jurnal Pendidikan Ekonomi Indonesia is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.


Web Analytics View My Stats