Einar H. Dyvik
Research expert covering Nordics and global data for society, economy, and politics
Employment in Indonesia - statistics & facts
Indonesia has one of the largest populations in the world, ranking fourth after China, India, and the United States. The nation has a relatively young population, indicating a large share of working-age individuals. This demographic condition gives Indonesia some advantages, as a young workforce tends to adapt to new technology and learn new skills faster than an older one. Indonesia is entering a demographic bonus phase, which is expected to peak between 2024 and 2030, during which the country is projected to have one of the largest workforces in Asia.
Looking ahead, despite Indonesia’s current demographic dividend, Indonesia needs to prepare for the challenges of an aging population. As the share of elderly citizens is expected to increase steadily in the coming years, it becomes crucial to ensure that the current productive-age population has sufficient employment opportunities. This will help build an empowered elderly population in the future and support a long-term demographic stability.
From an agricultural nation to a manufacturing nation
Indonesia's large, relatively low-cost labor force of nearly 150 million people makes it a suitable market for labor-intensive industries. Most of Indonesia's workforce is employed in the agricultural sector, followed by wholesale and retail trade, and manufacturing. As the country’s economy has been highly dependent on agriculture, it is unsurprising that this sector has been the largest employer for decades. However, as the economy matures, Indonesia has transitioned beyond just producing agricultural products, positioning the manufacturing sector in a central position as the largest GDP contributor in the country. As of 2024, Indonesia’s manufacturing sector directly accounted for around 14 percent of the country’s total employment, and workers in manufacturing earn more than those in the agricultural sector.Disparities in employment
Although Indonesia has experienced extensive economic development, there are several challenges limiting inclusive growth. A significant difference persists between the average monthly income of male and female workers across sectors and the nature of employment. Indonesian men generally earn higher wages than women, and women tend to have higher rates of informal employment. Disparities are also found between employment in urban and rural areas. Employment in Indonesian rural areas is more concentrated in the agricultural sector, which mostly provides informal employment with lower wages and limited insurance coverage. Consequently, many Indonesians migrate from rural to urban areas in search of better job opportunities. However, this migration often fails to improve their livelihoods, as many do not find well-paying jobs due to high competition and skill mismatches.Looking ahead, despite Indonesia’s current demographic dividend, Indonesia needs to prepare for the challenges of an aging population. As the share of elderly citizens is expected to increase steadily in the coming years, it becomes crucial to ensure that the current productive-age population has sufficient employment opportunities. This will help build an empowered elderly population in the future and support a long-term demographic stability.
