In Indonesia, an export boom and rapid, sustained gross domestic product (GDP) growth in the decade after 2000 was accompanied by real earnings that were flat on average, and even declined for many workers. Conventional models of growth and trade predict that labor productivity rises as an...

In an integrated global economy, specialisation in trade is an increasingly prominent strategy. A labour-abundant, resource-rich economy like Indonesia faces stiff competition for labour-intensive manufactures; meanwhile, rapid growth in demand for resources from China and India exposes it to...