Labour Market Adjustment to Indonesia's Economic Crisis: Context, Trends and Implications

Manning, Chris

doi:10.1080/00074910012331337803

Cited by 84 publications

(74 citation statements)

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“…Unemployment rates also hardly changed (from 9.9 percent to 10.3 percent), In other words, while very mild added worker effects may have increased participation, a smaller share of those in the labor force were employed. 17 14 In the sample of 15 that report sectoral employment, agricultural employment growth increased by 1.5 % points, service sector growth by 0.2 % points and industrial employment growth fell by 3.3% points 15 Past crises estimates suggest a similar story: during the 1997 Asian crisis, some 30-40% of displaced urban workers are estimated to have moved to agricultural jobs (Manning 2000). Evidence indicates that worker reallocation and the quality of new jobs created are procyclical, rather than countercyclical (Bowlus 1993).…”

Section: Figure 5: Decomposing the Slowdown In The Growth Of Gdp Per mentioning

confidence: 99%

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Fewer Jobs or Smaller Paychecks? Aggregate Crisis Impacts in Selected Middle-Income Countries

Khanna¹,

Newhouse²,

Paci³

2011

Policy Research Working Papers

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E S ABSTRACT Fewer Jobs or Smaller Paychecks? Aggregate Crisis Impacts in Selected Middle-Income CountriesThis paper reviews evidence from 44 middle income countries on how the recent financial crisis affected jobs and workers' income. In addition to providing a rare assessment of the magnitude of the impact across several middle-income countries, the paper describes how labor markets adjusted and how the adjustments varied for different types of countries. The main finding is that the crisis affected the quality of employment more than the number of jobs. Overall, the slow-down in earning growth was considerably higher than that in employment, and the decline in GDP was associated with a sharp decline in output per worker, particularly in the industrial sector. In several counties, hours per workers declined and hourly wages changed little. But both the magnitude and nature of the adjustments varied considerably across countries. For a given drop in GDP, earnings declined more in countries with larger manufacturing sectors, smaller export sectors, and more stringent labor market regulations. In addition, overall employment became more sensitive to GDP growth. These findings have implications that go beyond the recent financial crisis as they highlight (i) the limitations of focusing policies responses on maintaining jobs and providing alterative employment or replacement income for the unemployed and (ii) the critical role of fast-track data systems, capable of monitoring ongoing labor market adjustment during economic downturns, in supporting the design of effective policy responses. JEL Classification:E24, E32, J21

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Section: Figure 5: Decomposing the Slowdown In The Growth Of Gdp Per mentioning

confidence: 99%

“…17 Reduced earnings may lead to a rise in labor market participation. Some crises appear to have driven more women and children into the labor market, especially in rural areas (Manning 2000, McKenzie 2004and Ezemenari et al 2003. However, in others participation rates appeared unresponsive.…”

Section: Figure 5: Decomposing the Slowdown In The Growth Of Gdp Per mentioning

confidence: 99%

Fewer Jobs or Smaller Paychecks? Aggregate Crisis Impacts in Selected Middle-Income Countries

Khanna¹,

Newhouse²,

Paci³

2011

Policy Research Working Papers

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“…Whenever the wages in the modern sector fall below the reservation wage, workers will move back to the 'traditional sector' provided that the cost of moving is not too high . This process happened during the East Asian financial crisis in Indonesia, where millions of workers moved back to the agricultural sector and very little unemployment was detected in the modern sector (Hugo 2000;Manning 2000;Fallon and Lucas 2002).…”

Section: Earlier Findings and Our Hypothesismentioning

confidence: 99%

China: The Next Twenty Years of Reform and Development

Garnaut¹,

Golley²,

Song³

2010

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“…Produktivitas pekerja berkaitan dengan upah nominal (Manning, 2000). Tingkat upah tinggi yang menjadikan pekerja sejahtera hanya dapat dipenuhi apabila ada peningkatan produktivitas yang memadai sesuai dengan harapan pengusaha (Tjiptoherijanto, 1993; SME-RU, 2002).…”

Section: Tinjauan Referensi Hubungan Tingkat Upah Dan Produktivitasunclassified

Ketegaran Upah Nominal Untuk Turun Sebagai Sarana Rekonsiliasi Keinginan Pekerja dan Pengusaha Selama Masa Krisis

Susanto¹

2016

JEPI

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The decreasing of worker productivity, that happened in the crisis, would be a reason for employer to lower nominal wages. However, the crisis also led to a reduction of worker's real incomes due to higher inflation so the workers ask higher nominal wage to maintain their welfare. This research analysis nominal wage determination in Indonesian chemical industries during the crisis. This research uses regression analysis based on the dynamic panel data model. The results show that during the crisis, nominal wage rate is not decrease. Employer state that decline in nominal wage have a negative impact on company performance. During the crisis, downward nominal wage rigidity is a way for industrial relations reconciliation. Keywords: Crisis; Nominal Wage; Rigidity; Reconciliation; Industrial Relations AbstrakPenurunan produktivitas pekerja, yang terjadi dalam masa krisis, menjadi alasan bagi pengusaha untuk menurunkan upah nominal. Sementara itu, masa krisis juga menyebabkan penurunan upah riil akibat tingginya inflasi sehingga pekerja menuntut kenaikan upah nominal guna mempertahankan kesejahteraannya. Studi ini menganalisis penentuan upah nominal pada industri kimia dalam masa krisis. Studi ini menggunakan alat analisis regresi berdasar model data panel dinamis. Hasil studi menunjukkan bahwa selama masa krisis, tingkat upah nominal tidak mengalami penurunan. Pengusaha menyatakan bahwa penurunan upah nominal berdampak negatif pada kinerja perusahaan. Dalam masa krisis, ketegaran upah nominal untuk turun merupakan sarana rekonsiliasi hubungan industrial.

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Labour Market Adjustment to Indonesia's Economic Crisis: Context, Trends and Implications

Cited by 84 publications

References 10 publications

Fewer Jobs or Smaller Paychecks? Aggregate Crisis Impacts in Selected Middle-Income Countries

Fewer Jobs or Smaller Paychecks? Aggregate Crisis Impacts in Selected Middle-Income Countries

China: The Next Twenty Years of Reform and Development

Ketegaran Upah Nominal Untuk Turun Sebagai Sarana Rekonsiliasi Keinginan Pekerja dan Pengusaha Selama Masa Krisis

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