INFORMAL SECTOR – A SURVIVAL OR CONSOLIDATION LIVELIHOOD STRATEGY: A CASE STUDY OF THE INFORMAL SECTOR ENTREPRENEURS IN PALEMBANG CITY, INDONESIA

Abstract

The informal sector is inseparable from the population of Indonesia. Since the 1998 crisis, it has been the source of life for many people. Moreover, in the current era of demographic dividend, it becomes, albeit subsistent, the most popular survival livelihood strategy. This study aimed (1) to investigate and elaborate whether or not the informal sector was included in the survival or consolidation livelihood strategy and (2) to describe how this sector potentially transitioned from the survival livelihood strategy into the consolidation one. This quantitative research used surveys to collect data from 302 respondents. The results showed that the informal sector tended to be considered as the survival livelihood strategy, in that it was thought to accommodate all limitations of informal sector entrepreneurs, such as lack of skills, investment, and work standards, use of only simple technology, low access to banking and social services, and little to no interrelation with other sectors. Since only two of ten indicators of transition were met, namely education and income, the potential of informal sector for transforming from survival to consolidation livelihood strategy was categorically low and, thereby, classified as Rank 4.

Keywords

• informal sector
• livelihood strategy
• survival
• consolidation