LABOR MOBILITY

By
Nina Farliana

1
 Core
• Migration Theory → Professor W. Arthur Lewis (1954).
Enhanced: Professor John Fei & Gustav Ranis Lewis-Fei-
Ranis Model
• Context: economy of developing country → 2 sectors;
traditional agriculture & modern industrial sector
 Traditional agriculture → abundant labor supply, labor
productivity ↓.
 Modern industry → high labor productivity.
• Main focus:
 Labor transfer from the traditional sector to the modern sector.
 The growth of employment opportunities in the modern sector is
due to the expansion of production in the modern sector
2
 Migration Models

a. Human Capital Approach

b. Place Utility Model
c. Contextual Analysis
d. Value Expectancy Model

3
A. Human Capital Approach

• Basic: Individual decision making theory

(investment to increase human productivity).
• Individual decision: look for better
employment opportunities → higher income.
• So, migration → investment with
consideration of benefits & costs

4
 B. Place Utility Model

• Humans as rational living things→ compare

dwellings based on profit and loss.
• Also called the stress-threshold model
• The migration process goes through 2 stages;
1. Dissatisfaction or stress.
2. Evaluate the utility to move
• Influenced by factors; socio demographic
characteristics, characteristics of the area of origin
and destination and social ties

5
 C. Contextual Analysis

• Basic: influence of structural factors;

1.Characteristics of the area of origin and
destination,
2.Wage rate,
3.Land ownership and ownership system,
4.Family ties
5.Accessibility to public facilities and services.
• Migration → ecological process results
6
 D. Value Expectancy Model
• Focus: looking at the relationship between values,
perceptions and attitudes of individuals with the
intention to migrate.
• Intention of migration: gain wealth, status,
independence and morality.
• Empirical case: migration intention is influenced;
 Family & individual demographic characteristics
 Differences in employment opportunities between
regions.

7
FACTORS THAT INFLUENCE MIGRATION

8
 Labor Mobility in Indonesia
• Since the colonial era, until the New Order government
 Transmigration
• Legally Labor Surplus Indonesian labor exports to
Saudi Arabia & Malaysia.
• The basis used by the government:
 High demand for Indonesian workers → Cheap labor prices
 Unemployment Rate ↑
• Advantage;
 Micro: increase family income.
 Macro: increase foreign exchange from non-oil and gas
9
 International Migration
• Regulated in labor PP No. Per-05/Men/ 1998 & Kepmen
Tenaga Kerja No. Kep-1306/Men/ 1988. Juklak
penempatan dalam Peraturan Menteri Tenaga Kerja No.
02/ Men / 1994 dan Keputusan Menteri Tenaga Kerja
No. Kep. 44/ Men/ 1994.

• Advantage;
1. Does not need a large budget either central or regional.
2. Remittances other than for foreign exchange sources, can be
enjoyed by workers themselves.
3. Assisting the Family Planning program. 10
 Cont’…..
• Constraints: often obstructed by various regulations
and policies (from the recipient country) as an effort
to control the flow of migration (immigration).
• Emigration will be welcomed if;
1. Emigrants must be able to improve their own income
→ might be achieved if it is voluntary.
2. Emigrants do not underestimate the income of
people left behind (this differs from the opinions of
nationalists who think that brain drain harms
national interests)
11
 Cont’…..
• The presence of strangers is inevitable because;
1. Knowledge & technology transfer.
2. There are positions that cannot be filled by
Indonesians.
3. Its presence is expected to have an impact:
employment, business, and increased exports,
especially non-oil exports

• To avoid harming national interests → international

investment prerequisites & criteria must be
considered. 12
 Globalization era
To attract investment, without reducing the principle of foreign
placement policy, then
1.Creation of a stable & conducive political climate.
2.Confidence for investors → a support system is available in
sufficient quantities & of high quality.
3.Government policies that will benefit them both financially
and economically.
4.Awareness that we have become an integral part of the global
network in the fields of economy and trade.
5.In the era of industrialization and technological progress,
attention must be paid to increasing the ability of Indonesia's
strong human resources, as well as policies on the use of
foreign workers, which cannot be separated from other policies
such as finance, industry, the Sospol and Hamkamnas
13
14