human capital may be underinvested in by firms. In such situations, the value of transferrable human capital will not be accurately reflected by the wages for a job or the marginal product of a worker in that job. However, such things as the social value of on the job training may be difficult to measure. This paper will examine the correlates of wages, job satisfaction and the provision of on the job training to identify what types of jobs are likely to be most welfare and human capital enhancing.

In conclusion, it is clear the theoretical and empirical literature on scarring has developed with a strong focus on developed countries, particularly the US, the UK and some European countries where panel surveys with a sufficiently long time series exist. The only stylized facts are that there is a negative correlation between present spells of unemployment for an individual and their future likelihood of employment and their future expected wages. Why this is the case is less clear, with the evidence for scarring being mixed, particularly for the US. This is understandable given the identification issues emphasized by the early work of Heckman and Borjas (1980). Scarring may be caused by human capital depreciation or signaling or may be just a pattern generated by individual heterogeneity. For the UK however, there is now considerable evidence of scarring effects for employment probability and wages, even for studies that use panel data to control for the individual heterogeneity and the issue of initial conditions. Clearly though, it is too soon to make any general claims about scarring in most other countries (particularly developing countries), where research is limited. Also, the findings from western countries may be driven by certain labor market characteristics that are different in developing countries (possibly because of large informal sectors). Even when scarring is driven by individual heterogeneity rather than a causal relation between spells of employment, the individual heterogeneity that matters may be different in developing countries.

Lastly, there is also evidence that certain forms of employment, particularly self‐ employment and non‐fulltime employment, can result in wage scarring not dissimilar to that caused by unemployment. A research agenda that focuses on developing countries can build upon these two categories of research, with the added possible considerations of informality and labor market segmentation. Such research could seek to understand the ways in which involvement in certain types of employment, hinders or contributes to future labor market outcomes for individuals in developing countries. We make a contribution to this literature specifically in regards to Indonesia.

# **3. Job Quality and Mobility in the Indonesian Labor Market**

# **_3.1 Introduction_**

This section begins by introducing the context of youth in the Indonesian labor market, and the data we use, which is from the Indonesia Family Life Survey (IFLS). Section 3.2 discusses descriptive statistics for the two samples of IFLS data that will later be used in fixed effects estimations. In section 3.3, we consider how key job characteristics (such as wages, 10