Majority of Indonesian Workers Do Not Work in Fields Related to Their Education
The phenomenon of education-job mismatch is increasingly becoming a concern amidst Indonesia’s large productive-age population. Instead of being a demographic advantage, this condition is considered likely to trigger new problems for the national labor market.
A study by NEXT Indonesia Center shows that most workers in Indonesia work in fields that do not align with their educational background or skills.
The Director of NEXT Indonesia Center, Herry Gunawan, believes that this condition is not just a matter of choosing the wrong major, but rather an indication of structural problems within the economy.
“We are facing a situation where degrees often no longer serve as the primary ticket to the job market. The mismatch between the education system and industry needs has created massive inefficiencies which, if left unaddressed, will become a ‘time bomb’ for national development,” he said in a statement in Jakarta on Sunday (17/5).
Data from Statistics Indonesia (BPS) also shows that the Indonesian labor market is still dominated by the informal sector. As of February 2026, the number of informal workers reached 87.74 million people, much higher than formal workers which were recorded at 59.93 million people. The dominance of the informal sector is considered to increase the potential for mismatch because many jobs in this sector do not require specific skills.
Herry explained that labor mismatches are divided into two types: vertical and horizontal. Vertical mismatch occurs when the level of education is not commensurate with the job being done, while horizontal mismatch arises when the field of study differs from the profession pursued.
Referring to data from the International Labor Organization (ILO) in 2023, about 57.3% of workers in Indonesia experience vertical mismatch. This condition consists of workers whose education is lower than the job requirements or vice versa. According to Herry, this problem is most experienced by college graduates.
“So only about 40% work according to their education,” he said.
Meanwhile, from a horizontal perspective, about 33.5% of higher education graduates work in fields that are not relevant to their major. In fact, diploma graduates are said to have a relatively high level of horizontal mismatch.
“While horizontally, about 33.5% of higher education graduates work in fields that are not relevant to their educational background. It is also very ironic to see that DI/II/III graduates have a fairly high level of horizontal mismatch, reaching 42.03%,” he said.
He also highlighted that those with higher education actually take longer to find jobs compared to those with lower education. This condition is considered to indicate that the needs of the industry are not yet in sync with the education system.
As a result, workers who are in a mismatch position risk receiving lower and stagnant wages compared to workers who work in their field. This is considered a long-term loss for national economic productivity.
The NEXT Indonesia Center study also found that poor and vulnerable groups are dominated by informal workers. Conversely, the upper economic class mostly works in the formal sector.
“This means that formal employment is the key to ‘moving up’ economically. However, the challenge is that our formal sector has not been able to grow fast enough to keep pace with the surge in new labor force,” said Herry.
According to him, improving the education system alone is not enough to overcome this problem. The government is also considered to need to encourage economic transformation that can create quality jobs and absorb skilled workers.
The study also showed that vocational training and internships play an important role in reducing mismatch. Graduates who have participated in training are recorded as having a lower level of job mismatch compared to those who have never participated in training.
Herry believes that the labor market information system also needs to be strengthened so that people have a clearer picture of industry needs.
“We need an adaptive information system so that career and education choices are no longer based on assumptions or momentary trends, but on real industry needs that can save the future of Indonesia’s productive generation,” he concluded. (Z-2)