The Effects of Education and Household Employment Ratio on Labor Market Outcomes of Indonesia’s Youth Population

Abstract

Indonesia's young population makes up almost a quarter of the total population. This amount becomes human capital for Indonesia, especially in the employment aspect. However, most of the young working-age population gets unsatisfactory labor market outcomes, namely being Youth NEET and informal workers with high economic risk. This study aims to: (i) determine the characteristics of youth labor market outcomes; (ii) analyze the effects of education level and household employment ratio on youth labor market outcomes. The research uses raw data from the August 2020 National Labor Force Survey and the Multinomial Logistics Regression analysis method with five labor market outcomes compiled based on the concept of decent work, namely Youth NEET, workers with high economic risk, precarious workers, and formal workers (without and with work experience). The results showed that a low level of education increases the probability of young people becoming Youth NEET, informal workers with high economic risk, and precarious workers compared to experienced formal workers. Meanwhile, the higher the household employment ratio, the lower the probability of the young population becoming Youth NEET, precarious workers, and formal workers without experience compared to experienced formal workers. These results illustrate that the work culture at home has an impact on the activeness of young people to work. However, this enthusiasm has not been able to save the youth from less decent work. Another finding shows that young women, young people who live in villages, are unmarried, and have never attended training have a higher probability of obtaining less decent work outcomes