IESET.
Hypotheses·labour·labour_reform_indonesia_omnibus_2020_employment

Indonesia's 2020 Omnibus Law on Job Creation (UU Cipta Kerja: fixed-term-contract liberalisation, severance reduction, outsourcing expansion, minimum-wage formula recalibration) raised the Indonesian formal-employment share by at least 2 pp by 2024 relative to a synthetic control of ASEAN peers, partially offsetting the COVID labour-market shock.

PARTIALengine/runs/labour_reform_indonesia_omnibus_2020_employment

PARTIAL — mean_gap=+1.767, |gap|/pre_sd=3, p_perm=0.714 (gap below 0.5×pre_sd or placebo p≥0.10)

confidence cueThe result is useful, but not decisive. Treat it as a clue, not a settled conclusion.

policy briefMixed or noisy

In ordinary language

When minimum wages rise high relative to normal local pay, do lower-skill workers keep their jobs, or does hiring fall at the margin?

plain answer

The evidence is suggestive but not decisive. mean_gap=+1.767, |gap|/pre_sd=3, p_perm=0.714 (gap below 0.5×pre_sd or placebo p≥0.10)

why it matters

Labor-market rules often help some workers while risking job loss or slower hiring for others. This test looks for that tradeoff in observable employment or unemployment data.

how the test works

It compares 7 country or place units from 2010 to 2024, using a synth did design, with fixed effects for country and year.

what was measured
What changed
  • Indonesia omnibus 2020
What we checked
  • Formal employment share
  • Informal employment share
  • Unemployment rate
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

No evidence packet has been generated yet.

Results

engine/runs/labour_reform_indonesia_omnibus_2020_employment
1007550250201020172024IDNMYSTHAPHLVNMKHMIND
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show formal_employment_share across 7 sampled countries over 2010–2024.
The shapes above are stylised — none of the lines are real data.
Placeholder for labour_reform_indonesia_omnibus_2020_employment. Published chart will be generated from engine/runs/labour_reform_indonesia_omnibus_2020_employment/chart_data.json.

Pre-registration

registration ordering unverified
first-spec commit 4c8ce8e · 2026-07-18T22:11:21Z
run generated · 2026-04-30T10:15:30Z
Run timestamp predates this path's first git-add commit (rebase, rename, or pre-git local run). Spec hash is still the path's first-add commit — not repository HEAD — but ordering is not a clean pre-registration proof.

Indonesia's 2020 Omnibus Law on Job Creation (UU Cipta Kerja: fixed-term-contract liberalisation, severance reduction, outsourcing expansion, minimum-wage formula recalibration) raised the Indonesian formal-employment share by at least 2 pp by 2024 relative to a synthetic control of ASEAN peers, partially offsetting the COVID labour-market shock.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

SUPPORTED if synth-DiD gap on Indonesian formal-employment share > +2.0 pp by 2024 AND informal-share gap is not statistically more positive than +1.0 pp at p<0.10. REFUTED if formal-employment gap < +0.5 pp OR informal- share gap > +2.0 pp (informalisation backfire).

formal test & threshold
test:      Synth-DiD on Indonesian formal-employment share 2020-2024 vs ASEAN donor pool, placebo permutation at p<0.10.

Method

Template
synth_did
Fixed effects
country, year
Clustering
country
Sample
7 countries · 2010 – 2024
Evidence type
associational

Data

VariableSourceTransform
formal_employment_share
outcome
world_bank_wdi:SL.EMP.TOTL.SP.ZStier 2
level
informal_employment_share
outcome
world_bank_wdi:SL.UEM.TOTL.ZStier 2
level
unemployment_rate
outcome
world_bank_wdi:SL.UEM.TOTL.ZStier 2
level
indonesia_omnibus_2020
treatment
constructed:indicator for 2020-Q4 UU Cipta Kerja enactmenttier 5
indicator
gdp_per_capita_real
control
world_bank_wdi:NY.GDP.PCAP.KDtier 2
log
trade_openness
control
world_bank_wdi:NE.TRD.GNFS.ZStier 2
level
terms_of_trade_index
control
world_bank_wdi:TT.PRI.MRCH.XD.WDtier 2
level

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — labour_reform_indonesia_omnibus_2020_employment

Verdict: PARTIAL — mean_gap=+1.767, |gap|/pre_sd=3, p_perm=0.714 (gap below 0.5×pre_sd or placebo p≥0.10)

Pre-registration

  • Claim: Indonesia's 2020 Omnibus Law on Job Creation (UU Cipta Kerja: fixed-term-contract liberalisation, severance reduction, outsourcing expansion, minimum-wage formula recalibration) raised the Indonesian formal-employment share by at least 2 pp by 2024 relative to a synthetic control of ASEAN peers, partially offsetting the COVID labour-market shock.
  • Falsification rule: SUPPORTED if synth-DiD gap on Indonesian formal-employment share > +2.0 pp by 2024 AND informal-share gap is not statistically more positive than +1.0 pp at p<0.10. REFUTED if formal-employment gap < +0.5 pp OR informal- share gap > +2.0 pp (informalisation backfire).

Synthetic-control estimate

  • shape: synth_did
  • treated_country: IDN
  • event_year: 2020
  • n_donors: 6
  • donor_weights (top): {'THA': 0.2934, 'PHL': 0.2617, 'KHM': 0.2424, 'MYS': 0.2026, 'VNM': 0.0}
  • pre_rmse: 2.7158205514272216
  • pre_period_sd: 0.5989507956047437
  • mean_post_gap: 1.7673393280921605
  • end_period_gap: 1.6550749150356865
  • post_period_years: [2020, 2024]
  • placebo_p_value: 0.7142857142857143
  • n_placebos: 6
  • method: synthetic-control via NNLS, permutation inference

Variables resolved

  • world_bank_wdi:SL.UEM.TOTL.ZS → unemployment_rate (outcome, n=8106)
  • world_bank_wdi:NY.GDP.PCAP.KD → gdp_per_capita_real (controls, n=14131)
  • world_bank_wdi:NE.TRD.GNFS.ZS → trade_openness (controls, n=10779)

Generated by scripts/run_synth_did.py at 2026-04-30T10:15:30+00:00

Strongest opposing argument

Every hypothesis ships with its charitable opposing argument. The framework earns credibility by handling objections at their strongest, not weakest.

Notes

Treatment dated 2020-Q4 (Omnibus enactment November 2020; challenged at Constitutional Court 2021; revised Perppu/Law 6/2023). COVID coincides with treatment beginning; the donor pool absorbs the common shock.

Authored framework. Read the transparency note.