SURVIVING ON THREE WHEELS & TWO FEET: An Economic Exploration of Indonesia’s Urban Informal Sector—Investigating the Associations of Various Characteristics on the Income of Street Vendors in Jakarta

Abstract

Despite the visibility and widespread eminence of the informal sector in Indonesia, official census data focusing on incomes at the street-vending level remain negligible. Recent discourse surrounding the linkages of the informal economy with the formal sector is inconclusive and the importance of street-vending is controversial. Although street-vending is considered both as a survival strategy for the poor and source of livelihood and income-generation, it is often considered an urban problem. By grounding my research in existing but limited empirical studies and past literature on developing countries, I use the case of Jakarta, Indonesia, to employ a mixed-methods research design with primary & secondary data to explore potential associations of background & demographics characteristics, business-related characteristics, and livelihood characteristics with levels of income generated amongst street-vendors. Primary data is obtained from 150 street-vendors, and secondary data is derived from official census data of IPUMS-International. The methodology adopts a descriptive statistical analysis as the qualitative method, and employs empirical strategy to obtain some quantitative insights. By the nature of the fieldwork and due to limited observations, the paper overall provides a suggestive and descriptive evidence at best. Some key insights are derived from livelihood characteristics (i.e. financial inclusivity) on levels of income generated, as well as interesting nuances when income is contextualized as a ratio of Indonesia’s minimum wage. The unintended effects of relocation that this paper investigates attempts to shed light for policymakers to better evaluate regulations placed on Indonesia’s informal sector.