This seminar presents some key findings of a recently published ADB book entitled Indonesia: enhancing productivity through quality jobs. It discusses several new developments on these issues under Jokowi, and raises some policy dilemmas in the field.

The book investigates both the longstanding challenge of providing better jobs for low productivity workers in agriculture and the informal sector and new challenges to prepare the workforce for new jobs in the digital and increasingly automated economy. Supply side pressures have moderated somewhat while job creation has been steady, despite slow jobs growth in manufacturing since the Asian Financial Crisis. On the bright side, many more educated females are now working in higher productivity jobs in modern services, even though overall participation rates have stalled. Urbanisation is associated with improved wages and a productivity bonus from more education especially in medium sized cities, while the low quality of schooling has some unfortunate implications for improvements in productivity.

Under Jokowi, the employment record has improved and wages have grown faster - but not all workers have benefited, and the outcome of more intensive public investments in skills is uncertain. Policy dilemmas in labour policy relate to separating out economic from social objectives and being transparent on the economic costs and benefits of different interventions, which is a particularly difficult in regard to benefits from long-term investments in human capital.