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The severe economic contraction caused by the COVID-19 pandemic has led to high unemployment rates among college graduates. Fresh graduates entering the labor market are often highly sensitive to prevailing economic conditions. The impact of graduating at an unfavorable time can also vary significantly among workers, depending on their field of study. This study examines the effect of graduation timing, proxied by the unemployment rate, on labor absorption in Indonesia and how long these effects persist. Second, it analyzes the differences in job market sensitivity across disciplines among college graduates in Indonesia, particularly during economic contractions. The data used in this study come from the 2021 Indonesian National Labor Force Survey (Sakernas). The findings indicate that those who graduate during unfavorable economic conditions tend to experience significant income declines for over 10 years. Moreover, they face lower chances of obtaining decent jobs and are more likely to be overeducated for their roles. Additionally, college graduates from STEM fields experience less income compared to those from social sciences and humanities disciplines. The findings of this study are expected to provide valuable insights for policymakers in promoting income stability, aligning education with labor market demands, ensuring equal access, and fostering cross-disciplinary inclusivity. These efforts could contribute to developing a resilient and adaptive workforce capable of overcoming economic challenges and supporting sustainable economic growth.

This study concludes that graduates entering the workforce during economic downturns experience significant and prolonged income declines, often lasting over a decade.These graduates face reduced opportunities for securing decent employment and are more prone to being overeducated for their positions.Furthermore, the study reveals that graduates from STEM fields demonstrate greater resilience to economic shocks compared to those from social sciences and humanities, highlighting the importance of aligning education with labor market demands to foster a more adaptive and resilient workforce.

Further research should investigate the effectiveness of targeted retraining programs designed to equip graduates from social sciences and humanities with in-demand technical skills, thereby enhancing their employability during economic downturns. Additionally, studies could explore the role of internships and apprenticeships in bridging the gap between academic training and industry needs, particularly for graduates entering the labor market during periods of high unemployment. Finally, research is needed to assess the impact of government policies, such as unemployment benefits and wage subsidies, on mitigating the long-term negative consequences of graduating during economic crises and promoting a more equitable labor market for all graduates. These investigations should consider regional variations in labor market conditions and the specific challenges faced by different demographic groups to inform the development of more effective and inclusive policies.

  1. Field of Study and University Graduates' Early Employment Outcomes in Italy during 1995–2004... doi.org/10.1111/j.1467-9914.2009.00459.xField of Study and University Graduates Early Employment Outcomes in Italy during 1995yAAAe2004 doi 10 1111 j 1467 9914 2009 00459 x
  2. A global panel analysis comparing carbon emissions across levels of economic development | Jurnal Ekonomi... doi.org/10.52813/jei.v14i1.562A global panel analysis comparing carbon emissions across levels of economic development Jurnal Ekonomi doi 10 52813 jei v14i1 562
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