Why Is Educated Unemployment in Indonesia So High?
The number of educated unemployed in Indonesia is very high. Based on data from Statistics Indonesia (BPS) as of May 2026, the number of educated unemployed in Indonesia reached 1,033,182 people. Educated unemployed includes those who are graduates of diploma IV, bachelor’s, master’s and doctoral programmes. This figure accounts for around 14.31% of the total 7.22 million national unemployed. So why is the number of educated unemployed in Indonesia so high?
The Ministry of Manpower (Kemnaker) assesses that the main factor behind the high number of educated unemployed in Indonesia is the mismatch between the competencies of the workforce and the needs of the business and industrial world. “The phenomenon of unemployment among university graduates is caused by a mismatch between job competencies and the skills possessed, as well as low digital literacy and soft skills,” said the Head of the Manpower Planning and Development Agency (Barenbang) at the Ministry of Manpower, Anwar Sanusi.
Another factor behind the high educated unemployment in the country is the slowing growth of formal employment. On the other hand, the number of new university graduates is increasing. “The growth of formal employment has not been proportional to the number of new graduates, coupled with the preference of graduates who tend to wait for certain formal jobs,” Anwar said.
Rapid technological developments and industrial transformation have not been matched by the education and training system. This condition has caused many graduates to lack the competencies required by the labour market. The Head of the Public Relations Bureau at the Ministry of Manpower, Faried Abdurrahman Nur Yuliono, added that limited work experience, mastery of soft skills, and competency certification are also factors affecting the low absorption of labour.
“The sector that most feels this challenge is the technology-intensive industrial sector. In several industrial areas, such as in Batam for example, incoming investment requires very specific qualifications,” Faried said.
The Ministry of Manpower, Faried explained, continues to work to address the mismatch between education graduates and industry needs. Several steps taken include aligning curricula with industry needs, involving industry in the learning process, and improving the competence of teaching staff. “Furthermore, expanding work practice and industry experience for students, as well as conducting periodic evaluations based on developments in labour needs so that graduates have competencies relevant to the needs of the world of work,” Faried said.