Income and employment: Evidence from the Indonesian transmigration program

Abstract

The transmigration program, first implemented during the colonial era, became one of the biggest international population transfers in history. It aimed to mitigate Java’s population burden and promote regional economic expansion away from the island. Although prior literature has often judged the program as ineffective, these findings remain unclear due to their heavy reliance on qualitative assessments and field observations. Additionally, some transmigration villages experienced changes in their employment structures, mainly due to regional trade with neighboring settlements. In this study, the transmigration program is quantitatively examined and evaluated by comparing the income and employment structures of transmigrants who remained with those who chose to leave. Covariate variables were included to explain the factors causing changes in income. A difference-in-difference ordinary least squares and panel data random-effect regression were employed to analyze income changes at the individual level. The sample consisted of 284 individuals who moved between Indonesian Family Life Survey Waves 1, 2, and 3, explicitly citing transmigration as their motivation. This observed gap can be explained by the covariates in each model, highlighting factors such as marital status. The program’s success varied among regions and was also influenced by specific conditions within transmigration settlements.

Keywords

Transmigration / Income / Employment change / Indonesia / Labor force

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