Not all that it seems : narrowing of gender gaps in employment during the onset of covid-19 in Indonesia

Ida used to be a stay-at-home mother with three children. When the pandemic hit Indonesia in 2020, her husband – who had been the family’s breadwinner as driver for a local travel guide – was laid off, quickly plunging Ida’s family into economic hardship. Ida realized that she needed to bring in income, so she began making and selling fried foods (gorengan) to help provide for her family.

Ida’s story is not unique. She is among the 2.4 million Indonesian women who entered the labor market early in the pandemic. However, Ida’s story also points to a rather subtle point that is often overlooked in broader discussions about the pandemic’s impacts on employment participation: that the quality of the job matters as much as the job itself. And in Ida’s case, as with many Indonesian women, she was not in a position to take a quality job because she lacked the necessary qualifications and experience and needed to remain close to her children and home.

Our research looks at the initial gendered impacts of the COVID-19 pandemic on employment participation and job quality in the Indonesian labor market. At first sight, it might seem that the pandemic empowered Indonesian women. For example, our estimates suggest that the onset of the pandemic narrowed the gender gap in employment participation by 14 percent (see figure 1, first bar chart on the left). Further, we find that the employment increase among females is largely driven by first-time workers, like Ida, whose entry into the labor market is necessitated by the pandemic-induced economic shock.

Figure 1.

However, while this narrowing of the participation gap is a substantial milestone—considering that female labor force participation in Indonesia has largely stagnated over the past two decades from 52 percent in 2000 to only 54 percent in 2019 (see Gender Data Portal)—the overall increase in female work participation masks the pandemic’s troubling implication on overall job quality.

Our analysis shows the entry into employment among females is primarily driven by workers with less than a high-school education, residing in rural areas, and working as casual workers or unpaid family workers in the agriculture sector. Meanwhile, women with a college degree are negatively affected by the pandemic, with 4.2 percent lower likelihood to be employed.

Further, the pandemic halted and reversed Indonesia’s momentum in formalizing its labor market. The share of formal jobs dropped dramatically in August 2020, falling lower than the amount five years prior. Many Indonesian women turned to informal jobs in the services and agriculture sectors to support their families during the pandemic.  For example, among women, the share of unpaid family workers substantially increased by 17.7 percent, while the proportion of waged employees decreased by 14 percent (see figure 1).

The widespread rise in informal jobs during periods of economic downturn is to be expected because people need new income sources to survive during a crisis. Because looking for a job becomes relatively more difficult during crisis periods, informal jobs present a seemingly quick solution, as they tend to be associated with lower entry barriers. However, such increasing informality presents policymakers with a long-term issue, as lower-quality jobs arguably provide workers with less protection and less stability against future economic shocks.  This is epitomized by the fact that, during the onset of the pandemic, both female and male informal workers in Indonesia experienced greater reductions in monthly earnings than their formal counterparts, despite facing significantly fewer reductions in work hours.

Informal jobs are also less likely to offer long-term sustainability to women’s employment. The narrowing of the gender gap in employment may be short-lived, as women could soon exit the labor market as the economy recovers, and the opportunity and social costs of women working informally begin to outweigh the benefits. 

For these reasons it is important that policymakers design policies to shift towards higher-quality employment, particularly among females. Potential policies may include:

1. Improving working arrangements to better accommodate care responsibilities. It is often the case that women shift to informal, lower-quality self-employment jobs because these jobs provide greater flexibility for shouldering childcare responsibilities while continuing work. Enforcing flexible work arrangements, by extending the provisions and coverage of maternal leave policies, can help bring more women into the formal sector.
2. Enhancing the Labor Market Information System (LMIS). Job matching services and vocational training can aid jobseekers in finding suitable jobs. Additionally, an improved LMIS would also boost job search efficiency by minimizing the duration and the costs of job search, thus improving the resiliency of the economy toward future crises.
3. Improving social and gender norms through behavioral and social media campaigns. As the prevailing norms continue to define the types of work that are deemed “acceptable” for women, policymakers should work to counteract these norms and encourage women’s participation in higher quality jobs, such as in the science, technology, engineering and math (STEM) fields. Promoting changes in these norms through behavioral and social media campaigns—such as showcasing female role models, displaying the equal division of chores between male and female, among others—could go a long way toward changing perceptions of what men and women can do in the workplace.