Hostname: page-component-5b777bbd6c-w9n4q Total loading time: 0 Render date: 2025-06-18T19:09:20.064Z Has data issue: false hasContentIssue false

Evaluating active labour market programmes: Possibilities for youth employment in Indonesia and beyond

Published online by Cambridge University Press:  16 June 2025

Rizki Anggara*
Affiliation:
BPS-Statistics of Prabumulih Municipality, Prabumulih, Indonesia
Ilmiawan Auwalin
Affiliation:
Airlangga University, Faculty of Economics and Business, Surabaya, Indonesia
*
Corresponding author: Rizki Anggara; Email: rizki.anggara@bps.go.id

Abstract

The Indonesian government has implemented the Pre-Employment Card Programme in response to current employment challenges, including high unemployment and underemployment rates among the youth in Indonesia. This research aims to analyse the Programme’s impact on the labour market outcomes, especially involving the youth. The research employs propensity score matching to examine the Programme’s impact on the probability of securing employment and the work hours among the youth. The study involved participants who were unemployed and employed when enrolling in the programme. The results show that the programme was statistically significant in increasing the probability of employment among the unemployed participants. However, it was not statistically significant to increase the work hours of those employed during the enrolment. These findings provide an initial assessment of the programme’s effectiveness in addressing employment challenges faced by the youth in Indonesia.

Type
Original Article
Copyright
© The Author(s), 2025. Published by Cambridge University Press on behalf of The University of New South Wales

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Article purchase

Temporarily unavailable

References

Al Ayyubi, MS, Pratomo, DS and Prasetyia, F (2023) Does pre-employment card program improve Indonesian youth labor market performance in pandemic era? Cogent Economics & Finance 11(2), 119. https://doi.org/10.1080/23322039.2023.2267752.CrossRefGoogle Scholar
Alegre, , Casado, D, Sanz, J and Todeschini, FA (2015) The impact of training-intensive labour market policies on labour and educational prospects of NEETs: Evidence from Catalonia (Spain). Educational Research 57(2), 151167. https://doi.org/10.1080/00131881.2015.1030852.CrossRefGoogle Scholar
Auer, P, Efendioğlu, Ü and Leschke, J (2005) Active Labour Market Policies Around the World: Coping with The Consequences of Globalization. International Labour Organization.Google Scholar
Bernhard, S and Kruppe, T (2012) Effectiveness of further vocational training in Germany: Empirical findings for persons receiving means-tested unemployment benefits. Journal of Contextual Economics: Schmollers Jahrbuch 132(4), 501526. https://doi.org/10.3790/schm.132.4.501.CrossRefGoogle Scholar
Biewen, M, Fitzenberger, B, Osikominu, A and Paul, M (2014) The effectiveness of public-sponsored training revisited: The importance of data and methodological choices. Journal of Labor Economics 32(4), 837897. https://doi.org/10.1086/677233.CrossRefGoogle Scholar
Blázquez, M, Herrarte, A and Sáez, F (2019) Training and job search assistance programmes in Spain: The case of long-term unemployed. Journal of Policy Modeling 41(2), 316335. https://doi.org/10.1016/j.jpolmod.2019.03.004.CrossRefGoogle Scholar
Bonoli, G (2017) Active labour market policies for an inclusive growth. In Deeming, C and Smyth, P (eds) Reframing Global Social Policy. Bristol, UK: Policy Press. 169188.10.2307/j.ctt1zkjzqg.14CrossRefGoogle Scholar
BPS (2020) The National Labor Force Survey Booklet February 2020. Available at https://www.bps.go.id/en/publication/2020/08/28/2aaf3f1339f9295704cb198f/the-national-labor-force-survey-booklet-february-2020.html (accessed 5 March 2024).Google Scholar
BPS (2021) Labor Force Situation in Indonesia August 2021. Available at https://www.bps.go.id/en/publication/2021/12/07/ee355feea591c3b6841d361b/labor-force-situation-in-indonesia-august-2021.html (accessed 5 March 2024).Google Scholar
BPS (2022) Analysis of Indonesia Population Profile. Available at https://www.bps.go.id/en/publication/2022/06/24/ea52f6a38d3913a5bc557c5f/analysis-of-indonesia-population-profile.html (accessed 5 March 2024).Google Scholar
BPS (2023) The National Labor Force Survey Booklet August 2023. Available at https://www.bps.go.id/en/publication/2023/12/22/ffb3e2d42b94d727d97e78d8/the-national-labor-force-survey-booklet-august-2023.html (accessed 5 March 2024).Google Scholar
Bratti, M, Ghirelli, C, Havari, E and Santangelo, G (2022) Vocational training for unemployed youth in Latvia. Journal of Population Economics 35(2), 677717. https://doi.org/10.1007/s00148-021-00877-8.CrossRefGoogle ScholarPubMed
Brown, AJG and Koettl, J (2015) Active labor market programs: Employment gain or fiscal drain? IZA Journal of Labor Economics 4(1), 136. https://doi.org/10.1186/s40172-015-0025-5.CrossRefGoogle Scholar
Burger, A, Kluve, J, Vodopivec, M and Vodopivec, M (2022) A comprehensive impact evaluation of active labour market programmes in Slovenia. Empirical Economics 62(6), 30153039. https://doi.org/10.1007/s00181-021-02111-6.CrossRefGoogle Scholar
Caliendo, M and Kopeinig, S (2008) Some practical guidance for the implementation of propensity score matching. Journal of Economic Surveys 22(1), 3172. https://doi.org/10.1111/j.1467-6419.2007.00527.x.CrossRefGoogle Scholar
Card, D, Kluve, J and Weber, A (2018) What works? A meta analysis of recent active labor market program evaluations. Journal of the European Economic Association 16(3), 894931. https://doi.org/10.1093/jeea/jvx028.CrossRefGoogle Scholar
Centeno, L, Centeno, M and Novo, ÁA (2009) Evaluating job-search programs for old and young individuals: Heterogeneous impact on unemployment duration. Labour Economics 16(1), 1225. https://doi.org/10.1016/j.labeco.2008.02.004.CrossRefGoogle Scholar
Considine, M, Sol, E, Lewis, JM and O’Sullivan, S (2015) Getting Welfare to Work: Street-Level Governance in Australia, the UK, and the Netherlands. Oxford, United Kingdom: Oxford University Press.10.1093/acprof:oso/9780198743705.001.0001CrossRefGoogle Scholar
Coordinating Ministry for Economic Affairs of the Republic of Indonesia (2022) Kartu Prakerja Program Management Report 2021. Available at https://public-prakerja.oss-ap-southeast-5.aliyuncs.com/www/ebook-reporting/Laporan-Manajemen-Pelaksana-Program-Kartu-Prakerja-Tahun-2021-English.pdf (accessed 5 March 2024).Google Scholar
Costabella, LM (2017) Do high school graduates benefit from intensive vocational training? International Journal of Manpower 38(5), 746764. https://doi.org/10.1108/IJM-01-2016-0008.CrossRefGoogle Scholar
Dengler, K (2019) Effectiveness of active labour market programmes on the job quality of welfare recipients in Germany. Journal of Social Policy 48(4), 807838. https://doi.org/10.1017/S0047279419000114.CrossRefGoogle Scholar
Destefanis, S, Fragetta, M and Ruggiero, N (2023) Active and passive labour-market policies: The outlook from the Beveridge curve. Applied Economics 55(55), 65386550. https://doi.org/10.1080/00036846.2022.2159010.CrossRefGoogle Scholar
Dias, MC, Ichimura, H and van den Berg, GJ (2013) Treatment evaluation with selective participation and ineligibles. Journal of the American Statistical Association 108(502), 441455. https://doi.org/10.1080/01621459.2013.795447.CrossRefGoogle Scholar
Ernst, E, Merola, R and Reljic, J (2022) Labour market policies for inclusiveness: A literature review with a gap analysis. ILO Working Paper No. 78. Available at https://doi.org/10.54394/SEPQ5405 (accessed 5 March 2024).CrossRefGoogle Scholar
Escudero, V (2018) Are active labour market policies effective in activating and integrating low-skilled individuals? An international comparison. IZA Journal of Labor Policy 7(4), 124. https://doi.org/10.1186/s40173-018-0097-5.CrossRefGoogle Scholar
Escudero, V, Kluve, J, López Mourelo, E and Pignatti, C (2019) Active labour market programmes in Latin America and the Caribbean: Evidence from a meta-analysis. The Journal of Development Studies 55(12), 26442661. https://doi.org/10.1080/00220388.2018.1546843.CrossRefGoogle Scholar
Esping-Andersen, G (1990) The Three Worlds of Welfare Capitalism. Cambridge, U.K: Polity Press.Google Scholar
Focacci, CN (2020) “You reap what you sow”: Do active labour market policies always increase job security? Evidence from the Youth Guarantee. European Journal of Law and Economics 49(3), 373429. https://doi.org/10.1007/s10657-020-09654-6.CrossRefGoogle Scholar
Gentilini, U (2022) Social protection and jobs responses to COVID-19: A real-time review of country measures. World Bank. Available at https://openknowledge.worldbank.org/handle/10986/3363 (accessed 12 June 2024).Google Scholar
Heckman, J, Ichimura, H, Smith, J and Todd, P (1998) Characterising selection bias using experimental data. Econometrica 66(5), 10171098. https://doi.org/10.230/2999630.CrossRefGoogle Scholar
Heckman, JJ, LaLonde, RJ and Smith, JA (1999) The economics and econometrics of active labor market programs. In Handbook of Labor Economics. Elsevier, 18652097.Google Scholar
Hohmeyer, K and Wolff, J (2012) A fistful of euros: Is the German one-euro job workfare scheme effective for participants? International Journal of Social Welfare 21(2), 174185. https://doi.org/10.1111/j.1468-2397.2011.00830.x.CrossRefGoogle Scholar
ILO (2016) What Works: Active Labour Market Policies in Latin America and the Caribbean. Available at https://www.ilo.org/sites/default/files/wcmsp5/groups/public/@dgreports/@dcomm/@publ/documents/publication/wcms_492373.pdf (accessed 5 March 2024).Google Scholar
ILO (2019) What Works: Promoting Pathways to Decent Work. Available at https://www.ilo.org/sites/default/files/wcmsp5/groups/public/@dgreports/@inst/documents/publication/wcms_724049.pdf (accessed 5 March 2024).Google Scholar
ILO (2020) The Role of Public Employment Programmes and Employment Guarantee Schemes in COVID-19 Policy Responses. Available at https://researchrepository.ilo.org/esploro/outputs/995219110502676 (accessed 5 March 2024).Google Scholar
ILO (2022) Global Employment Trends for Youth 2022. Available at https://www.ilo.org/sites/default/files/wcmsp5/groups/public/@dgreports/@dcomm/@publ/documents/publication/wcms_853321.pdf (accessed 17 January 2025).Google Scholar
Ingold, J and McGurk, P (2023) Employer Engagement: Making Active Labour Market Policies Work. Bristol: Bristol University Press.Google Scholar
Khandker, SR, Koolwal, GB and Samad, HA (2009) Handbook on Impact Evaluation: Quantitative Methods and Practices. World Bank Publications.10.1596/978-0-8213-8028-4CrossRefGoogle Scholar
Kluve, J (2010) The effectiveness of European active labor market programs. Labour Economics 17(6), 904918. https://doi.org/10.1016/j.labeco.2010.02.004.CrossRefGoogle Scholar
Kluve, J, Card, D, Fertig, M, Góra, M, Jacobi, L, Jensen, P, Leetmaa, R, Nima, L, Patacchini, E, Schaffner, S, Schmidt, CM, Bvd, Klaauw and Weber, A (2007) Active Labor Market Policies in Europe Performance and Perspectives. Berlin, Heidelberg: Springer Berlin Heidelberg.10.1007/978-3-540-48558-2CrossRefGoogle Scholar
Kluve, J, Puerto, S, Robalino, D, Romero, JM, Rother, F, Stöterau, J, Weidenkaff, F and Witte, M (2019) Do youth employment programs improve labor market outcomes? A quantitative review. World Development 114, 237253. https://doi.org/10.1016/j.worlddev.2018.10.004.CrossRefGoogle Scholar
Kluve, J and Rani, U (2016) A review of the effectiveness of Active Labour Market Programmes with a focus on Latin America and the Caribbean. ILO Working Papers 994901193402676. Available at https://www.ilo.org/publications/review-effectiveness-active-labour-market-programmes-focus-latin-america (accessed 5 March 2024).Google Scholar
Kraft, K (1998) An evaluation of active and passive labour market policy. Applied Economics 30(6), 783793. https://doi.org/10.1080/000368498325480.CrossRefGoogle Scholar
Kruppe, T and Lang, J (2018) Labour market effects of retraining for the unemployed: The role of occupations. Applied Economics 50(14), 15781600. https://doi.org/10.1080/00036846.2017.1368992.CrossRefGoogle Scholar
Lammers, M and Kok, L (2021) Are active labor market policies (cost-)effective in the long run? Evidence from the Netherlands. Empirical Economics 60(4), 17191746. https://doi.org/10.1007/s00181-019-01812-3.CrossRefGoogle Scholar
Larsson, L (2003) Evaluation of Swedish youth labor market programs. Journal of Human Resources 38(4), 891927. https://doi.org/10.2307/1558784. CrossRefGoogle Scholar
Lewis, JM, Nguyen, P and Considine, M (2021) Are policy tools and governance modes coupled? Analysing welfare-to-work reform at the frontline. Policy & Society 40(3), 397413. https://doi.org/10.1080/14494035.2021.1975217.CrossRefGoogle Scholar
Lindley, J, McIntosh, S, Roberts, J, Czoski Murray, C and Edlin, R (2015) Policy evaluation via a statistical control: A non-parametric evaluation of the ‘Want2Work’ active labour market policy. Economic Modelling 51, 635645. https://doi.org/10.1016/j.econmod.2015.09.018.CrossRefGoogle Scholar
Lutz, W, Cuaresma, JC, Kebede, E, Prskawetz, A, Sanderson, WC and Striessnig, E (2019) Education rather than age structure brings demographic dividend. Proceedings of the National Academy of Sciences - PNAS 116(26), 1279812803. https://doi.org/10.1073/pnas.1820362116.CrossRefGoogle ScholarPubMed
Martin, JP (2015) Activation and active labour market policies in OECD countries: Stylised facts and evidence on their effectiveness. IZA Journal of Labor Policy 4(1), 129. https://doi.org/10.1186/s40173-015-0032-y.CrossRefGoogle Scholar
McKenzie, D (2017) How effective are active labor market policies in developing countries? a critical review of recent evidence. The World Bank Research Observer 32(2), 127154. https://doi.org/10.1093/wbro/lkx001.CrossRefGoogle Scholar
Ministry of State Secretariat Republic of Indonesia (2020) Presidential Regulation Number 76 of 2020 on Amendments to Presidential Regulation Number 36 of 2020 Concerning the Development of Work Competence through the Pre-Employment Card Program. Available at https://peraturan.bpk.go.id/Details/140611/perpres-no-76-tahun-2020 (accessed 5 March 2024).Google Scholar
Misra, R (2015) Impact of demographic dividend on economic growth: A study of BRICS and the EU. International Studies 52(1-4), 99117. https://doi.org/10.1177/0020881717714685.CrossRefGoogle Scholar
Mourelo, EL and Escudero, V (2017) Effectiveness of active labor market tools in conditional cash transfers programs: Evidence for Argentina. World Development 94, 422447. https://doi.org/10.1016/j.worlddev.2017.02.006.CrossRefGoogle Scholar
Nguyen, P, Considine, M and O’Sullivan, S (2016) Welfare-to-work: experience in the emerging Vietnamese welfare state. Asia Pacific Journal of Public Administration 38(4), 270280. https://doi.org/10.1080/23276665.2016.1253957 CrossRefGoogle Scholar
Nguyen, P, Putra, F, Considine, M and Sanusi, A (2023) Activation through welfare conditionality and marketisation in active labour market policies: Evidence from Indonesia. Australian Journal of Public Administration 82(4), 488506. https://doi.org/10.1111/1467-8500.12602.CrossRefGoogle Scholar
Nordlund, M and Greve, B (2018) Labour market: Focus on active labour market policies. In Greve, B (ed) Routledge Handbook of the Welfare State. Oxford: Routledge, 366377.10.4324/9781315207049-33CrossRefGoogle Scholar
Oesch, D (2010) What explains high unemployment among low-skilled workers? Evidence from 21 OECD countries. European Journal of Industrial Relations 16(1), 3955. https://doi.org/10.1177/0959680109355307.CrossRefGoogle Scholar
Pastore, F and Pompili, M (2020) Assessing the impact of off-the-job and on-the-job training on employment outcomes: A counterfactual evaluation of the PIPOL program. Evaluation Review 44(2-3), 145184. https://doi.org/10.1177/0193841X20966112.CrossRefGoogle ScholarPubMed
Pignatti, C and Van Belle, E (2021) Better together: Active and passive labor market policies in developed and developing economies. IZA Journal of Development and Migration 12(1), 127. https://doi.org/10.2478/izajodm-2021-0009.CrossRefGoogle Scholar
Presisi Indonesia (2022) Impact evaluation of Kartu Prakerja as a COVID-19 Recovery Program. Available at https://public-prakerja.oss-ap-southeast-5.aliyuncs.com/www/ebook-reporting/Evaluasi-dampak-kartu-prakerja-eng.pdf (accessed 5 March 2024).Google Scholar
Quintini, G (2014) Skills at Work: How Skills and their Use Matter in the Labour Market. OECD Social, Employment and Migration Working Papers, No. 158, Paris: OECD Publishing. https://doi.org/10.1787/5jz44fdfjm7j-en CrossRefGoogle Scholar
Risak, M and Kovács, E (2017) Active and passive labour market policies in Austria and Hungary: A comparative analysis of recent changes and trends. European Labour Law Journal 8(2), 168187. https://doi.org/10.1177/2031952517712128.CrossRefGoogle Scholar
Romer, D (2012) Advanced Macroeconomics, 4th edn. New York: McGraw-Hill/Irwin Google Scholar
Rosenbaum, PR and Rubin, DB (1985) The bias due to incomplete matching. Biometrics, 41(1), 103116. https://doi.org/10.2307/2530647 CrossRefGoogle ScholarPubMed
Rosenbaum, PR and Rubin, DB (1983) The central role of the propensity score in observational studies for causal effects. Biometrika 70(1), 4155. https://doi.org/10.1093/biomet/70.1.41.CrossRefGoogle Scholar
Rotar, LJ (2021) Evaluation of the effectiveness of employment programme on young unemployed people. Inžinerinė Ekonomika 32(1), 6069. https://doi.org/10.5755/j01.ee.32.1.23276.Google Scholar
Rothenberg, AD, Gaduh, A, Burger, NE, Chazali, C, Tjandraningsih, I, Radikun, R, Sutera, C and Weilant, S (2016) Rethinking Indonesia’s informal sector. World Development 80, 96113. https://doi.org/10.1016/j.worlddev.2015.11.005.CrossRefGoogle Scholar
Sage, D (2018) Reversing the negative experience of unemployment: A mediating role for social policies? Social Policy & Administration 52(5), 10431059.10.1111/spol.12333CrossRefGoogle Scholar
Valiente, O, Zancajo, A and Jacovkis, J (2020) The coordination of skill supply and demand in the market model of skill formation: testing the assumptions for the case of Chile. International Journal of Lifelong Education 39(1), 90103. https://doi.org/10.1080/02601370.2019.1678692.CrossRefGoogle Scholar
Verick, SS (2023) The challenge of youth employment: New findings and approaches. The Indian Journal of Labour Economics 66(2), 421437. https://doi.org/10.1007/s41027-023-00438-5.CrossRefGoogle Scholar
Wiśniewski, Z (2022) The effectiveness of Polish active labour market policies. Bulletin of Geography 56, 125132. https://doi.org/10.12775/bgss-2022-0017.Google Scholar