Labour market dimensions of poverty in

Labour market dimensions of poverty in Indonesia have not so far been the subject of detailed analysis, although sufficient reliable data is available to provide the basis for such research. This topic is of particular interest now, partly because jobs have grown very slowly and unemployment has risen in Indonesia since the 1997-98 financial crisis. The question arises as to whether the lack of jobs is the major challenge for poverty alleviation programs. Alternatively, the main issue may not be just overcoming unemployment through job creation programs, or through such programs alone. Rather it could relate to ensuring that people have access to more productive and stable jobs, either through improved human capital (training, education and health interventions), providing better information on job opportunities, or by encouraging the ‘right’ kinds of investment that enable workers to receive a decent wage. Research in Latin America suggests, for example, that poverty is partly associated with labour market failure: the poor experience high rates of unemployment and under-employment because of low levels of mobility across regions and sectors, rather than because there are not enough jobs to go around.