Women, Informality and the Missing Link in Indonesia’s Social Protection

Before sunrise in many Indonesian cities, women are already at work.

In a narrow alley in South Jakarta, Rina prepares rice and fried snacks that she will sell at a roadside stall. Her earnings fluctuate daily. Some days she earns enough to cover school fees for her children, other days she barely breaks even. Rina represents what policymakers often call the “missing middle” of Indonesia’s labour market. She is not poor enough to qualify for most social assistance programs, yet her informal work means she has no employment contract, no work injury protection and no retirement savings.

A few kilometers away, in a busy office district, another woman begins her day differently but faces similar uncertainty. Nur works as an office cleaner hired through a subcontracting service. Her job allows her to support her family in Bekasi, but the position is temporary and offers limited access to employment benefits. When contracts change between service providers, workers like Nur can lose their jobs overnight.

Meanwhile, on the streets of Jakarta, Siti checks her phone while waiting for the next ride request. As an ojek online driver, she relies on a digital platform for income. On good days she can complete dozens of trips, but her earnings fluctuate depending on demand, weather and platform incentives. Digital platforms have opened new opportunities for women to participate in the urban economy, yet workers like Siti remain largely outside traditional employment protection frameworks.

These three stories, from a street vendor, a contracted service worker and a gig-economy driver, illustrate a broader reality of Indonesia’s labour market, where informality remains the dominant form of employment, especially for women.

Behind the narrative of Indonesia as a rising middle-income economy lies a persistent structural issue: the feminization of informal work and its implications for social protection coverage.

According to Statistics Indonesia (BPS), nearly 59 percent of Indonesian workers are engaged in informal employment. The share is even higher among women. Around 64 percent of female workers are in informal jobs, compared with about 56 percent of men (BPS, 2024).

Informal work includes self-employed micro-entrepreneurs, domestic workers, unpaid family workers, home-based producers and gig-economy workers operating outside formal employment contracts.

For many women, informal work is not a choice but a necessity. Structural barriers, from unequal care responsibilities to limited access to stable formal employment, push women toward flexible but precarious forms of work.

Indonesia’s female labour force participation rate remains around 53 percent, significantly lower than the regional average in East Asia (World Bank, 2023). Research by the International Labour Organization (ILO) shows that many Indonesian women leave formal employment or transition into informal work due to caregiving responsibilities within households (ILO, 2023).

Amartya Sen famously argued that development should be understood as the expansion of human capabilities. In Development as Freedom, he writes that development requires “the removal of major sources of unfreedom such as poverty and social deprivation.”

In Indonesia’s labour market, the absence of social protection for millions of informal women workers represents precisely such a deprivation. The consequences extend beyond individual households. Informality creates a significant gap in social protection coverage, one that disproportionately affects women.

Over the past decade, Indonesia has made major progress in building its social protection architecture. Jaminan Kesehatan Nasional (JKN) program has expanded health insurance coverage to nearly the entire population. Meanwhile, employment-based programs administered by BPJS Ketenagakerjaan provide protection against workplace accidents, old-age income security and unemployment risks. However, these systems were historically designed around formal employment relationships.

As a result, many informal workers remain outside contributory social insurance schemes. By the end of 2025, around 48.6 million workers were registered as active participants in BPJS Ketenagakerjaan programs. While this represents significant progress in expanding coverage, it still reflects only a portion of Indonesia’s workforce of more than 140 million workers.

The gap is particularly visible among informal workers. Of Indonesia’s approximately 61 million informal workers, only about 8.6 million are registered in BPJS Ketenagakerjaan programs, highlighting the scale of the protection gap.

Even in the rapidly expanding gig economy, social protection coverage remains limited. Indonesia is estimated to have around two million ride-hailing drivers, yet only about 250,000 are registered as participants in BPJS Ketenagakerjaan programs, highlighting the challenge of extending employment protection to platform-based workers.

This creates what the World Bank describes as the “missing middle”, workers who are not poor enough to qualify for social assistance but not formally employed enough to participate easily in contributory social insurance programs.

Women dominate this missing middle.

Informal female workers often face multiple barriers to social security participation. These include irregular income streams that make regular contributions difficult, limited awareness of available programs and administrative challenges in registration.

As a result, millions of working women contribute to Indonesia’s economy without protection against workplace accidents, maternity risks or old-age poverty. This gap poses a long-term challenge for Indonesia’s development trajectory.

Indonesia is currently enjoying a demographic dividend, but population aging will gradually increase the importance of retirement security. Without expanded coverage, today’s informal workers, especially women, risk becoming tomorrow’s elderly poor.

The informal sector itself remains a major component of Indonesia’s economy. Studies suggest that informal economic activities account for a significant share of employment and economic output (ADB & BPS, 2010). Ignoring the social protection needs of this sector therefore undermines broader efforts to promote inclusive growth.

Addressing this challenge requires rethinking how social protection systems are designed.

First, social insurance programs must adapt to the realities of non-standard employment. Flexible contribution mechanisms, simplified registration procedures and digital payment systems could help accommodate workers with irregular incomes.

Second, policies must address the care economy that shapes women’s labor market participation. Expanding childcare services could significantly improve women’s ability to enter and remain in formal employment (World Bank, 2023).

Third, stronger outreach is needed to increase awareness among informal workers about social protection programs. Partnerships with cooperatives, worker organizations and digital platforms could help bring social protection closer to workers like Rina, Nur and Siti.

Women in Indonesia’s informal economy are not marginal workers. They are vendors, cleaners, caregivers, entrepreneurs and platform drivers who sustain families and communities across the country.

Each year, International Women’s Day invites the world to celebrate the achievements of women and reflect on the progress made toward gender equality. Yet behind the celebrations lies a persistent reality in Indonesia’s labor market: millions of women continue to work in jobs that remain largely invisible to the country’s social protection system.

If Indonesia is serious about building an inclusive welfare state, expanding social protection coverage for women in the informal economy is not merely a gender issue, it is a cornerstone of equitable development.

References

Asian Development Bank (ADB) & BPS-Statistics Indonesia. 2010. The Informal Sector and Informal Employment in Indonesia. Manila: Asian Development Bank.

International Labour Organization (ILO). 2021. Extending Social Security to Workers in the Informal Economy. Geneva: ILO.

International Labour Organization (ILO). 2023. Care Responsibilities and Women’s Employment in Indonesia. Geneva: ILO.

Sen, Amartya. 1999. Development as Freedom. New York: Alfred A. Knopf.

World Bank. 2023. Indonesia Jobs Diagnostic: Toward More and Better Jobs. Washington DC: World Bank.

World Bank. 2024. Social Protection for Indonesia’s Missing Middle. Washington DC: World Bank.

Data

Badan Pusat Statistik (BPS). 2024.

BPJS Ketenagakerjaan. 2025.