Micro and Macro Determinants of Precarious Employment in Indonesia: An Empirical Study of Paid Workers using Multilevel Binary Logistic Regression

Abstract

Decent work for all is one of the goals stated in the Sustainable Development Goals (SDGs). One indicator that can represent proper work conditions is the precarious employment rate (PER). In recent periods, the precarious employment rate in Indonesia has shown an increasing trend. It indicates a decent work deficit in Indonesia. In addition, the PER among provinces has a different figure. This study aims to analyze the micro and macro factors that influence the status of precarious employees in Indonesia. The analytical method used in this study is multilevel binary logistic regression. The results show that micro factors; namely the worker's characteristics, including age, education level, employment sector, previous work status, and urban-rural area; have a significant effect on the precarious status of employees. In terms of macro factors, it is found that an increase in the output of the industrial and construction sectors can reduce the tendency of a worker to become a precarious employee. Meanwhile, an increase in labour supply increases the likelihood of workers becoming precarious employees. Various parties, including society and government, have to put extra efforts to reduce the precarious employment rate by improving the quality of human capital and domestic products demand.