Indonesia’s demographic dividend tested as youth employment challenges grow

With an annual population growth rate of about 1.11%, Indonesia’s population is projected to reach 284.4 million in 2025, according to Statistics Indonesia (BPS). Between 2020 and 2030, the country is expected to benefit from a large working-age population, driven primarily by Gen Zs, who now make up nearly 28% of the population, or around 75 million people. 

Economists have long viewed this demographic structure as a potential engine for economic growth. However, experts warn that without sufficient employment opportunities and skills development, the dividend could quickly turn into a liability. 

Official data shows that nearly 10 million Gen Z Indonesians were classified as NEET (not in education, employment or training) as of 2023. Women account for a disproportionate share of this group, highlighting persistent structural barriers in youth employment and workforce participation. 

The pressure on young job seekers has intensified amid a slowing absorption of labour and an increasingly competitive job market. 

In early 2025, frustration spilled onto social media when #KaburAjaDulu, loosely translated as “Just escape for now,” went viral on X (formerly Twitter). The trend reflected a growing sentiment among young Indonesians who view migration as a pathway to better job prospects and higher wages abroad. Online discussions under the hashtag ranged from weighing the advantages and disadvantages of leaving the country to sharing practical advice on securing overseas jobs or scholarships, and even guidance on obtaining permanent residency or changing citizenship.

Compounding these challenges is the rapid adoption of artificial intelligence across industries. According to the World Economic Forum, about 23% of jobs globally are expected to change as AI reshapes workplace demands, adding urgency to the need for reskilling and adaptability among younger workers. In response, the Indonesian government launched the National Internship Programme in 2025, aimed at easing the transition from education to formal employment. 

The country's Ministry of Manpower reported that the programme met its target of 100,000 participants in its first year and is expected to continue in 2026 with a similar intake, particularly targeting fresh graduates.

Media Wahyudi Askar, Director of Public Policy at the Centre of Economic and Law Studies (CELIOS), said the initiative could help young Indonesians gain practical experience and improve access to formal jobs. However, analysts note that internships alone may not be enough unless accompanied by broader labour market reforms, stronger private-sector hiring, and education systems better aligned with future skills needs.

Manpower Minister Yassierli also recently shared an update on the programme’s progress, saying, “All three batches have been completed, meaning the target of 100,000 participants has been achieved. Participants are spread across various sectors, ministries and government agencies.”

He added, “For now, the target remains the same, at 100,000 participants per year,” signalling that the government intends to maintain the programme’s scale in 2026.

As the nation navigates the remainder of its 'demographic dividend' period, the challenge lies not only in having a young population, but in ensuring that this generation is productively employed, and able to see a future at home rather than abroad.