Do migrants get stuck in the informal sector? Findings from a household survey in four Indonesian cities

This article compares labour-market outcomes for individuals in migrant and non-migrant households in Indonesia. It introduces two new work-status groups - small-business operators and formal-casual or contract employees - in an effort to transcend the usual formal-informal distinction. We find that long-term migrants (LTMs) tend to gravitate to the small-business sector and to jobs with regular wages, whereas recent and very recent migrants are more likely to work in the informal sector. Our findings on the labour-market outcomes of successive generations of migrants are less conclusive. While a larger proportion of LTM children than that of their parents work in the formal sector, the children of migrant heads of households are less likely than those of non-migrants to find formal-sector jobs. We also find that distortionary labour-market regulations appear to diminish the overall benefits of migration.