International practices of income protection for unemployed persons: Implications for Indonesia

Indonesia is in the process of developing unemployment protection scheme to offer effective unemployment protection to Indonesian jobseekers and their families. Around the world, there are more than 80 countries that has been implemented such scheme. This publication showcases the good practices from other countries and provides brief recommendations on how Indonesia can adopt the scheme.

Setting the unemployment protection scheme becomes more relevant for all countries to protect both workers and employers from the unpredictable business environment changes. More and more crises happened and caused million people losing their jobs. The current COVID-19 crisis, for example, has destroyed the economy and caused massive layoff in almost all countries in the world. Indonesia is not an exception. A comprehensive unemployment protection is needed to help the unemployed maintain their livelihood during the transition and help them find new job immediately.

This publication provides lesson learn from countries that have been implementing the unemployment benefit scheme. Throughout the world at last count, 98 countries provided unemployment protection schemes, not counting countries that relied only on severance payments. Most of the countries, 82 of them, provided such benefits under a social insurance scheme described as unemployment insurance (UI). To complement UI, some countries also offer a variety of labour- market support measures to help unemployed workers find suitable employment as quickly as possible.

Understanding the important of this scheme, the government of Indonesia and other key labour actors have agreed to adopt the scheme. This publication will provide relevant insight and help the policy makers and other stakeholders to decide the most suitable scheme for the country.

The contents of this report were prepared and discussed with Indonesian stakeholders as part of the ILO/Japan Project in 2018 and 2019, and edited and designed as part of the ILO-UNIQLO Project in 2020.