THE LABOR MARKET IMPACT OF COVID-19 AND THE ROLE OF E-COMMERCE DEVELOPMENT: EVIDENCE FROM INDONESIA

Masagus M Ridhwan, Asep Suryahadi, Jahen Rezki and Immanuel Satya Pekerti

No WP/10/2021, Working Papers from Bank Indonesia

Abstract: We This study assesses the impact of COVID-19, measured by the reduction in work mobility and e-commerce growth, which has been expected to counteract the adverse effect of COVID-19, on the labor market outcomes of individual workers in terms of their employment prospects, work hours, total earnings, and earnings per hour in Indonesia. The data analyzed are combined from the labor force survey and ecommerce transaction values collected by Bank Indonesia, which is unique and publicly unavailable. The findings confirm that COVID-19 has adverse effects on workers’ labor market outcomes. However, e-commerce growth did not counteract the negative impact of COVID-19 as expected, but it still played a role as an employment buffer during the crisis. While e-commerce growth creates jobs, those jobs are mainly self-employment. Furthermore, e-commerce growth tends to suppress the earnings of workers. Our results imply that to optimize e-commerce to improve labor market outcomes beyond jobs creation in the informal sector, efforts are needed to increase the productivity of workers involved in e-commerce, such as through skills enhancement and other capacity-building programs.

Keywords: COVID-19; labor market; mobility; e-commerce; Indonesia (search for similar items in EconPapers)
JEL-codes: J22 J23 J46 J63 O33 (search for similar items in EconPapers)
Pages: 54 pages
Date: 2021
New Economics Papers: this item is included in nep-iue and nep-sea
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