The informal economy in Indonesia: size, composition and evolution

This study of statistical audit informal economy: an Indonesian case study was undertaken as part of an effort to clarify data- and statistics-related challenges faced in measuring and monitoring the size and trend of the informal economy in Indonesia. The paper provides a useful guide to monitor the implementation process of the National Mid-Term Development Plan (RPJMN) 2010-2014 in relation to the informal economy.

SOME recent empirical studies have inspired re-thinking of the role of the informal economy in the process of development. Is its persistence a cause for concern or is it another way in which the process of employment creation is mediated in developing economies? Is the state of informality driven by compulsion or choice or both? To what extent have the informal economy workers been affected by the Global Financial and Economic Crisis?
Designing appropriate policies and institutional arrangements to deal with the informal economy depend heavily on responses to these core questions.