Unemployment Among Higher Education Graduates in Indonesia
Growth Dynamics and Labor Market Mismatch (2019–2025)
DOI:
https://doi.org/10.63892/aletheia.2.2025.85-94Keywords:
Educated Unemployment, Education–Job Mismatch, Credential Inflation, Labor MarketAbstract
The expansion of higher education in Indonesia has been positioned as a strategic instrument for human capital development. However, empirical trends reveal a paradox: rising unemployment among Diploma and University graduates despite improvements in macro labor market indicators. This condition signals a structural mismatch between higher education outputs and labor market demand. Previous studies have largely focused on macro determinants of educated unemployment or micro-based mismatch analyses, leaving limited evidence on comparative unemployment growth dynamics across higher education levels in a national time-series perspective. Addressing this gap, this study aims to analyze trends and growth rates of unemployment among Diploma and University graduates in Indonesia from 2019 to 2025 and to examine their structural implications for employment policy. The study is grounded in Human Capital Theory as the grand theory, Credentialism as the middle-range theory, and job search and education–job mismatch models as applied theories. A quantitative descriptive-analytical approach with a time-series design is employed using secondary data from Indonesia’s National Labor Force Survey (SAKERNAS) 2019–2025. Findings reveal structural divergence: unemployment among Diploma graduates declined, while University graduates experienced positive growth. Meanwhile, employment expansion was concentrated in low-skilled labor segments, indicating the dominance of low-productivity jobs. These patterns confirm credential inflation, vertical–horizontal mismatch, and declining economic returns to degrees. The study’s novelty lies in its comparative measurement of unemployment growth across higher education tiers using medium-term national statistics. In conclusion, higher education expansion has not been matched by the absorptive capacity of high-skill labor markets. Policy recommendations include strengthening competency-based link and match strategies, adaptive curriculum reform, and integrated labor market information systems to mitigate educated unemployment sustainably.
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