Abstract

This study aims to determine the effect of internet usage on entrepreneurship in Indonesia. Probit regression is used in this study because the dependent variable is a binary category that indicates a family’s involvement in entrepreneurial activities. The data used in this study is secondary data sourced from the Survei Sosial Ekonomi Nasional (Susenas) in 2020 and 2021. The results show that internet usage increases the probability of entrepreneurship in Indonesia by 7.4 percentage points and is statistically significant. Further analysis shows that the effect of the internet is greater for necessity-based entrepreneurship and only affects rural areas in Indonesia. This research may have implications to add to the literature for entrepreneurship development in Indonesia to compete globally. read more

Abstract

Pollution (in this term, air pollution) is an environmental phenomenon that negatively impacts the lives of the broader community and harms all aspects of the human dimension, such as health and the economy. This study aims to quantify the impact of pollution on worker productivity in developing countries using longitudinal data from Indonesia in two periods (2007 and 2014) and utilizing satellite data to represent air pollution data better. This study uses an instrumental variable (IV) approach and expands it by quantifying health aspects as one of the transmissions in the relationship between pollution and productivity. The result is that pollution negatively impacts worker productivity, with a dominant negative effect transmitted by health factors and determines their productivity. For this reason, the government is involved in tackling increasing pollution to minimize the increase in disease cases while minimizing economic losses from this phenomenon in the future. read more

Abstract

Due to time constraints, mothers’ working may influence their child’s growth positively or negatively. However, previous studies have shown that the net effect remains varied. This study expands the limited literature in Indonesia, utilizing the last three waves of the IFLS as primary data by exploring maternal working status in the present and past, specifically during the child’s critical window, to see whether the results diverge. We overcome the potential endogeneity in mothers’ working status by using the number of small industries and cluster average of women’s employment rate in the subdistrict as instruments. Results show that the present working status does not affect the child’s growth. However, pregnant mothers’ employment has adverse effects on their children. Moreover, the detrimental impact of past working status also occurs in rural areas and, interestingly, in the upper 60% of households. This confirms that the effect does differ in each time frame. read more

Abstract

The dualistic market model suggests that self-employment in developing countries should be seen as a survival strategy that is taken by those who are locked out of the formal labour market rather than as a manifestation of entrepreneurial spirit. This study aims to provide empirical evidences on the nature of self-employment in Indonesia, and whether it is more appropriately seen as an entrepreneurial activity or merely as a survival mechanism, by examining self-employed workers’ characteristics and the determinants of entry and exit into the self-employment sector. Utilising individual-level panel data from the Indonesian Family Life Survey, this study finds that the self-employment sector in Indonesia is indeed better characterised as a survival strategy as in the dualistic market model. Moreover, entry into the self-employment sector arises in times of economic crisis, implying that it acts as an employment option, namely as a last resort. Consequently, instead of focusing on growing the business of self-employed workers, policies should be directed toward the relaxation of formal labour market entry constraints‒providing more decent jobs and protecting the livelihood of existing self-employed workers. read more

Abstract

The existence of heterogeneity in size and response in each sector cannot be neglected. Moreover, there is an interaction between sectors in the form of trade between intermediate input and intermediate output. This research offers a framework to mathematically and empirically prove the existence of systemic effects on intersectoral linkages in the economy. This research is the first to interpolate data by scaling and updating the IO table using the RAS procedure to obtain quarterly IO datasets from 2001 to 2022 timeframe. Mathematically, on simple deductive proofs that combine Cobb–Douglas and Leontief’s production function, research has revealed the propagation of systemic risk. Furthermore, by utilizing a previous literature model with data from Indonesia, empirical approaches simulate shocks, namely, crude oil prices and business confidence, by using the SVAR procedure. In this regard, the empirical results indicate that systemic effects on intersectoral linkages in Indonesia do exist. read more