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

Abstract

This study examines the relationship between climate policy uncertainty and the demand for renewable energy in the United States. The primary findings suggest that there is a nonlinear threshold effect resulting from climate policy uncertainty, as measured by the Climate Policy Uncertainty Index (CPU) and the Environmental Policy Uncertainty Index (ENVPU), on renewable energy demand (REC). The findings indicate a negative relationship between the CPU and the REC when the CPU is beyond a specific threshold. This suggests that economic agents adopt a cautious approach, sometimes referred to as the “wait and see” policy, in their renewable energy allocation. In essence, customers may opt to reduce their utilization of renewable energy in favor of alternate sources as a means to circumvent the investment risks associated with renewable alternatives. read more

Abstract

This study empirically examines the determinants of financial inclusion among Indonesian Muslims using individual-level panel data. We investigated financial inclusion indicators such as borrowing from financial institutions, bank account ownership, the borrowed amount, and savings in financial services. We analysed data from the Indonesian Family Life Survey (IFLS) fourth (2007) and fifth (2014) waves, offering a comprehensive dataset with unique socio-economic variables. We used Ordinary Least Squares and Logit estimations to identify factors influencing individuals’ access to financial services and the average borrowed amount. Our findings indicate that urban residents with higher wealth, predominantly males, have better access to financial services. Banks remain the primary source for loans among Indonesian Muslims. Access to commercial banks significantly impacts loan accessibility. Notably, Baitul Maal WatTamwil (BMT), an Islamic microfinance institution, enhances the probability of Indonesian Muslims accessing formal loans. read more

Abstract

This study aims to determine how the implementation of WFH (Work From Home) affects individual work productivity during the COVID-19 pandemic in Indonesia. National Labour Force Survey (Survei Angkatan Kerja Nasional/Sakernas) data for February 2021 were used in this study. In February 2021, the Sakernas questionnaire was added with questions related to the impact of COVID-19 on employment. This study used the instrumental variable analysis method, which accommodates the issue of endogeneity in the model and working in a crowded place (work_crowded) used as the instrument variable. The estimation results obtained through IV regression show that WFH significantly has a positive effect on work productivity. The group of respondents who implemented WFH in their work system, on average, has statistically higher productivity when compared to the group of respondents who did not implement WFH. read more

Abstract

The share of poor families with female heads of household is steadily increasing, from 14.41% in 2013 to 16.72% in 2019. This is in contrast to the declining poverty rate over the same period. We examine whether families with female heads of household tend to be less prosperous than those with male household heads using the wealth index constructed from the 2019 National Socioeconomic Survey data. In contrast to the hypothesized feminization of poverty theory, we find that households with female heads are more likely to be wealthier than those with male heads, even after controlling for sociodemographic factors of household heads as well as household characteristics. This finding sheds some light on the hypothesized feminization of poverty theory in the context of developing Asian countries. read more

Abstract

This study aims to estimate the impact of program cessation on the behavior of Program Keluarga Harapan (PKH) beneficiaries. We utilize the Propensity Score Matching (PSM) and Difference-in-Differences (DID) models to overcome potential bias in the estimation results. We use household longitudinal data from the PKH implementation pilot study. The results show that program cessation has a significant positive impact on the share of expenditure on food and the probability of children not attending school, as well as reducing the share of expenditure on education. On the other hand, program cessation has no impact on the utilization of health services, the share of expenditure on health, and the share of expenditure on milk and eggs. These findings indicate that the impact of PKH on behavior related to health tends to continue, while for behavior related to education it does not. read more