Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/305413 
Year of Publication: 
2024
Series/Report no.: 
ADBI Working Paper No. 1481
Publisher: 
Asian Development Bank Institute (ADBI), Tokyo
Abstract: 
Does export lead to improvement in labor market outcomes? The answer to this is not always clear from the literature. Despite the rising role of export markets, informality is still high, and inequality is worsening in many developing economies. In addition, export expansion driven by commodities has also been linked with the Dutch disease phenomenon. Using the case of a major commodity-dependent nation, namely Indonesia, we assess the labor market effect of a broader export expansion, which includes manufacturing exports apart from commodities. We examine Indonesia's export expansion during the early 2000s, which was triggered by the import demand shock in the People's Republic of China (PRC) following its accession to the World Trade Organization (WTO). We find that more exposure to export expansion improved individuals' formal employment opportunities in cumulative terms by 2014. Export expansion, however, does not appear to improve individuals' earnings growth in general, but only in specific cases. We further find this export expansion episode to be relatively progressive as it raises more formal employment opportunities and earnings growth for individuals in the lower- and middle-income brackets. As we cover all tradable goods, we are able to produce distinct impacts of different export categories. We show that the improvement in labor market outcomes in our findings is mainly underpinned by manufacturing export expansion, rather than commodities.
Subjects: 
export
labor market
informal job
earnings
inequality
Indonesia
People's Republic of China (PRC)
JEL: 
F14
F16
F63
F66
J31
J46
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper

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