International Labour Organisation: Modelling and Comparing the Employment Impacts of COVID-19 Crisis and Recovery Policies in Indonesia
The COVID-19 pandemic severely affected Indonesia’s economy, which had previously had steady growth. In 2020, the country experienced a recession with a GPD decline of 2.1%, leading to increased poverty and unemployment rates. The Indonesian government responded with a National Economic Recovery (PEN) program, which aimed to revitalize the economy through various fiscal interventions.
With the International Labour Organization Cambridge Econometrics, using our in-house macroeconomic model E3ME, helped estimate the employment outcomes from the recovery policies implemented in Indonesia.
The implemented policies were analysed simultaneously and individually to understand the distinct impacts that each policy had on employment.
The recovery policies had significant sectoral impacts.
Results show that In the longer-term, the policies allow for sustained additional employment creation. Employment levels could increase by 0.3% (around 500 thousand additional jobs) from 2025-2030.
The analysis demonstrates that while the recovery policies led to an increase in emissions in the short-term, new jobs created as a result of the policies produce less emissions than the national average.
700,000
additional jobs created in agriculture
690,000
additional jobs created in the services sector, including tourism
580,000
jobs created in business services
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