satisfaction and training) relate to each other and also, how these characteristics relate to the employment status categories defined by the IFLS. Characteristics for each job may be either welfare enhancing, human capital enhancing or both. Unfortunately, however, data on such characteristics such as the provision of training are only recorded in the last wave of IFLS, wave 4 (2007), so these data cannot be used in fixed effects estimations in section 4. Lastly, in section 3.4 we consider mobility between employment status categories across time using data for waves 1, 3 and 4 (as these three waves have a breakdown of employment category that includes different types of self‐employment).

# **_3.2 Context and data: Youth in the Indonesian Labor Market_**

There are several challenges that youth face in the Indonesian labor market, including unemployment and employment in forms of work that may be less desirable (such as unpaid family work). Rudimentary analysis of employment quality for youth has been presented in the recent ILO/Unicef/World Bank report‐ “Understanding children’s work and youth employment outcomes in Indonesia” (Aldobrandini & Panisperna, 2012). Employment quality has also been considered in the Human Development Department report on “Education, Training and Labour Market Outcomes for Youth in Indonesia” (Cerdan‐Infantes et al., 2010). Some interesting observations from these reports that are based on National Workforce Survey /Sakernas data are discussed below.

Interestingly, it has been observed that youth that have graduated from senior high school have a higher unemployment rate (26% in 2009) than youth with lower educational attainment (17% for junior high) but earn more than less educated youth when they are employed. This could be because high school graduates spend a longer period of time searching in the hope of finding a high paying job (which on average, they do). More generally, youth unemployment is about two and a half times that of the rest of the population. Indonesia is not the only developing country that has high rates of youth unemployment but it is important to remember that in developing countries, unemployed youth are not always economically worse off than employed youth.<sup>4</sup> Another finding that is the characteristic of developing countries, is the stark rural urban divide with most youth with jobs in urban areas in 2010 working in salaried employment (68%) while the most common type of work for youths in rural areas is unpaid (44%). In summary, it seems that youth unemployment in Indonesia “is an urban phenomenon which mainly affects educated workers” (Cerdan‐Infantes et al., 2010, p.13). This means that other types of scarring rather than unemployment scarring may be more likely to occur for rural and less educated youth. For example, this may include scarring from work in the informal sector or self‐employment.

> 4 It is possible that some unemployed youth receive economic support from their parents and families that allow them to enjoy a higher level of consumption than youth that are forced to work in low quality employment because there is no social safety net or family support available to allow them the space to look for work for an extended period of time.

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