Underemployment, Diversification and Off-Farm Employment in Indonesia

Harry T. Oshima


This paper deals with agricultural diversification and off-farm employment as methods of reducing not only rural but also urban unemployment in Indonesia. It looks into the positive effects as well as the difficulties of pursuing agricultural diversification. Also examined is the potential for raising the non-agricultural income of farm families particularly because of the large pool of underemployed rural labor. It points out the need to upgrade the quality of off-farm jobs to lessen the income inequalities between the agricultural and non agricultural sectors, and the need to substantially reduce the labor surplus to improve within and between disparities in family incomes. Finally, it makes policy recommendations regarding the promotion of agricultural diversification, off-farm employment, and the better generation of data needed for a more efficient policy implementation.

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