Generative AI Impact on Formal Jobs: Evidence from Indonesia

2026

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AI-generated summary

Generative AI is shifting Indonesian workers from formal to informal employment, not causing widespread job loss.

* Examines the impact of Generative AI (GenAI) on formal jobs in Indonesia using labor force survey data.
* Finds that GenAI exposure leads to a decrease in formal employment, particularly among younger workers and in high-skill service sectors.
* Suggests that workers displaced by GenAI are transitioning into freelance and gig-based work, indicating a shift towards informality rather than unemployment.

Tags: Generative AI, Indonesia, Formal Employment, Informality, Labor Market

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