Increasing the Participation of Persons with Disabilities in Formal Employment (ID0163)

Project Overview

The Indonesian government is committed to improving adaptive and inclusive welfare by encouraging the participation of persons with disabilities in the formal sector, as indicated in the 2025–2029 National Medium-Term Development Plan (RPJMN). Currently, the government does not have a standardized strategy and system/mechanism to ensure employment inclusivity. Therefore, it is necessary to develop a standardized job matching strategy and system to fill the gaps in the employment ecosystem, making it more inclusive and accommodating for persons with disabilities. This commitment will be piloted as a first step towards the adoption of a national policy, with three main outputs: (1) the formulation of a standardized job matching strategy and system for increasing the participation of persons with disabilities in formal employment through a collaborative multisectoral role; (2) the implementation of a pilot of this strategy and system for the formulation of a national policy; and (3) a policy draft for the establishment of a national strategy for Increasing the Participation of Persons with Disabilities in Formal Employment through Multisectoral Collaboration.

Targeted Issues

1.People with disabilities still face barriers to participating in formal employment. This is evident in the low Labor Force Participation Rate (LFPR) of people with disabilities, which in 2023 reached only 21.05%, far below the national LFPR of 69.48% (Sakernas, 2023). Meanwhile, in 2024, only 9.35% worked in the formal sector, meaning that the majority of persons with disabilities worked in the informal sector. Although this sector provides opportunities for productivity, the lack of labor protection and access to social security makes their position vulnerable. 2.This condition is reflected in the high poverty rate among persons with disabilities, which reached 13.81% in 2023, higher than the national poverty rate of 9.36% in the same period. 3.This problem also arises because the government does not yet have a strong strategy and standardized system to ensure employment inclusivity

Causes of the Problem

The main problem: 1.Why 1: Why is the WLP for persons with disabilities low? The majority of persons with disabilities do not have access to employment or are unable to work on a sustainable basis. 2.Why 2: Why is access to formal employment limited? Lack of skills, education, and suitable job opportunities, coupled with physical, social, and labor regulation barriers that are not yet favorable to persons with disabilities. 3.Why 3: Why are skills and education still lacking and why are there barriers? Low education levels, limited access to skills training, and workplace accessibility issues 4.Why 4: Why is access to education, training, and infrastructure still inadequate? Inclusive policies have not been fully integrated, labor regulations have not been consistently implemented, and socioeconomic data on persons with disabilities is not comprehensive enough for proper planning. 5.Why 5: Why are policies and implementation still weak and data limited? Stigma and negative perceptions from society and employers, lack of political priority and budget to promote employment inclusion, and lack of incentives for institutions that implement disability inclusive policies

Proposed Solutions

To increase the employment rate of persons with disabilities, especially in the formal sector, it is necessary to ensure that employment opportunities for persons with disabilities, supply and demand in the labor market, and the skills of persons with disabilities are aligned with market needs, through: 1.Mapping the Demand for Disabled Workers, through the identification of institutions/agencies/companies that open positions for people with disabilities. 2.Mapping the Labor Supply of Persons with Disabilities, through identifying the potential and interests of persons with disabilities, identifying the right types of jobs for each type of disability, and adjusting secondary education and training center curricula for persons with disabilities. 3.Job Matching, ensuring that points (1) and (2) are aligned by developing standardized job matching strategies and mechanisms. 4.Developing training types and curricula to ensure the capacity of persons with disabilities is aligned with labor market needs, either through government programs or other job training institutions. 5.Periodic Progress Monitoring, through monitoring the job placement matching rate for persons with disabilities; the suitability of accommodations for persons with disabilities (infrastructure, career paths, salary standards, flexible working hours), and the development of a business model concept for job placement and vocational training for persons with disabilities. 6.Encouraging Enablers to accelerate the increase in the employment participation of persons with disabilities through strengthening coordination mechanisms, role sharing, institutionalization, and necessary policies

Relevance to 5 OGI Strategic Issues

The proposed solutions are in line with the priority issues of Inclusive Public Services and Gender Equality, Diversity, and Social Inclusion. Public services designed to be inclusive will make it easier for persons with disabilities to obtain information and navigate the bureaucratic process to access employment opportunities. Thus, the principles of equality, diversity, and social inclusion can be realized.

Relevance to the Government's Priority Agenda

The Indonesian government has internalized the issue of disability employment in the 2025-2029 RPJMN in National Priority 6. This is emphasized through the main development indicator, namely "Percentage of Persons with Disabilities Working in the Formal Sector". In addition, this solution supports the President's quick wins through the Affirmative Business Card (KUA), which is one of the National Strategic Programs (PSN).

Expected Outcome

Through this solution, the desired outcome is an increase in the number of persons with disabilities working in the formal sector, through two outputs: 1) The establishment of a standardized job matching strategy and system; AND 2) The development of a pilot program for a standardized job matching strategy and system. The development of a standardized job matching strategy and system document is aimed at improving the system and creating an inclusive and accommodative employment ecosystem for persons with disabilities by optimizing existing programs and institutions. Then, this strategy and implementation need to be implemented through the development of a pilot strategy and job matching system as a first step to be adopted as a policy at the national level. The two outputs above will support the achievement of the national indicator “Increase in the percentage of persons with disabilities working in the formal sector.” This indicator is also supported by the role of local governments, which is measured in a standardized manner through regional disability employment indicators, namely the number of ULDs in the employment sector at the district/city/provincial level and the number of persons with disabilities who receive assistance from the Employment Disability Service Unit and/or from the agency in charge of employment. Realizing access for persons with disabilities to the labor market requires collaboration and synergy between the central government, local governments, and OPDis. One concrete manifestation of this collaboration is accelerating the increase in the employment participation of persons with disabilities through strengthening coordination mechanisms, role sharing, institutionalization, and necessary policies

Commitment Plan

Results Indicators | Output | Timeline

Development of an initial concept for a strategy/draft and standardized job matching system | The initial concept of the standardized job matching strategy and system | Estimated output end of year 1 (M-12)

Development of guidelines to optimize the role of the Employment Disability Service Unit (ULD) in job matching and providing assistance to companies and job seekers with disabilities. | 1.Pilot testing of initial strategies and job matching systems Increasing the Participation of Persons with Disabilities in Formal Employment through Multisectoral Collaboration 2.Policy recommendation paper on Increasing the Participation of Persons with Disabilities in Formal Employment through Multisectoral Collaboration | Estimated output end of year 1 (M-12)