Shadow Pensions: An Exploratory Field Study of Informal Old-Age Income Strategies Among Jakarta’s Unregistered Workforce
By Fajrin Andi Muhamad Pratama
Indonesia’s main old-age insurance program, BPJS Ketenagakerjaan, is built almost entirely around formal employment-yet three in five Indonesian workers are informal, and only a small fraction of them are ever enrolled. National statistics capture the size of that gap well; they say almost nothing about what people actually do instead. I spent three days in Jakarta interviewing market traders and ojek drivers to find out. The results were not quite what I expected going in. I had assumed arisan, the rotating savings groups many of these workers already belong to, might function as a kind of informal pension. It mostly doesn’t. What came up instead, in nearly every conversation, was a simpler and more troubling answer: most respondents plan to keep working for as long as their bodies allow, with no formal or informal backstop behind that. This paper documents that pattern in a small sample (n = 15) and situates it against the Wharton School’s Pension Research Council’s 2026 move to expand its research agenda toward emerging-market retirement security.
Source SSRN
