Edy Santoso, Vebry Eka Kusuwardhani, Fivien Muslihatinningsih

The Dynamics of Indonesian Migrant Workers: Their Short- and Long-Term Impact

Introduction

The dynamics of indonesian migrant workers: their short- and long-term impact. This study uses Panel VECM to analyze short- & long-term factors affecting Indonesian migrant worker migration in Java (2008-2023), informing policy needs.

Abstract

Research Originality: This study integrates factors influencing Indonesian migrant workers into a Panel VECM model that captures both short- and long-term dynamics. Research Objectives: This study investigates the factors that affect the short- and long-term migration of Indonesian migrant workers. Research Methods: This study uses the Vector Error Correction Model (VECM) approach. Panel data were analyzed for six provinces on Java Island, covering the period 2008 to 2023. Empirical Results: This study found significant positive effects of provincial minimum wage, employment opportunity rates, and poverty levels on the short-term migration of Indonesian migrant workers in Java. In the long term, all variables positively influenced Indonesian migrant worker migration, except for poverty, which had a non-significant effect. Implications: These findings indicate an anomaly in the factors influencing the PMI. Therefore, we assert that policymakers in Indonesia must periodically review and adjust the UMP and implement effective price-control measures to ensure that workers’ basic needs are met at a reasonable cost of living. JEL Classification: C33, F22, I32, J61, J62

Review

The submitted study, "The Dynamics of Indonesian Migrant Workers: Their Short- and Long-Term Impact," offers a pertinent and methodologically sophisticated examination of the factors driving Indonesian migrant worker (PMI) migration. A key strength lies in its innovative use of a Panel Vector Error Correction Model (VECM), which effectively integrates multiple influencing factors to capture both the short-run dynamics and long-run equilibrium relationships. Focusing on six provinces in Java Island over the period 2008-2023, the research provides a valuable and timely perspective on a significant segment of the global migrant labor force. The methodological choice of a Panel VECM is highly appropriate for dissecting the temporal complexity of migration drivers. The empirical results are particularly insightful, demonstrating that provincial minimum wage, employment opportunity rates, and poverty levels exert a significant positive effect on short-term migration. In the long term, these variables, alongside others, continue to positively influence migration, with the notable exception of poverty, which shows a non-significant effect. The authors correctly identify this as an "anomaly," suggesting a nuanced relationship where initial economic hardship might strongly trigger migration, but its sustained impact may diminish or transform over extended periods. These findings carry substantial implications for both theoretical understanding and practical policymaking related to Indonesian migrant workers. The observed shift in poverty's influence from short- to long-term provides a critical, non-obvious dimension to the discourse on migration push factors. The study's clear call for policymakers to regularly review and adjust minimum wages (UMP) and implement robust price-control measures to manage the cost of living is a direct and actionable recommendation, derived logically from the empirical evidence. This research stands to significantly contribute to evidence-based interventions aimed at supporting migrant workers and managing migration flows more effectively.

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