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Exports and Job Creation in Indonesia Before and After the Asian Financial Crisis

Haryo Aswicahyono and Chris Manning

Departmental Working Papers from The Australian National University, Arndt-Corden Department of Economics

Abstract: Employment generation has been a challenge in Indonesia since the Asian Financial Crisis (AFC), especially in labor-intensive manufacturing. We examine the direct and indirect impact of exports on jobs, based on an analysis of input-output tables over the period 1985-2005, and compare these findings with the earlier pre-crisis period. The paper finds that fewer jobs were created through exports in manufacturing industries in after the AFC, because of slower growth in manufacturing exports and a shift away from light industry. However, there was an increase in service sector jobs, partly because of linkages with the main export industries in manufacturing and primary industry. Besides intensified competition from other lower-middle income Asian economies, the main constraints to job creation through exports appear to have been on the supply side; these include too poor infrastructure, an uncertain investment climate and tight labor regulations.

Keywords: exports; employment creation; manufacturing growth; input-output analysis; Indonesia; Southeast Asia (search for similar items in EconPapers)
JEL-codes: F16 J23 O14 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2011
New Economics Papers: this item is included in nep-dev, nep-hme, nep-lma and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:pas:papers:2011-11

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