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Tourism Exports, Digitalisation, and Employment during the COVID-19 Pandemic: The Case of Indonesia

Tourism Exports, Digitalisation, and Employment during the COVID-19 Pandemic: The Case of Indonesia
22 December 2023
Mini P. Thomas, Archana Srivastava, Keerti Mallela
Indonesia, COVID-19, Tourism, Digitalisation, Employment

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This study aims to examine the relationship amongst tourism exports, digitalisation, and employment in tourism and allied sectors of Indonesia; and to throw light on how low-, medium, and high-skilled employment have been impacted during the coronavirus disease (COVID-19) pandemic. We include both transport service exports and travel service exports within the ambit of tourism exports. Digitalisation is defined in terms of digitally deliverable services. The study classifies employment at varying skill levels on the basis of educational qualifications, and occupation-based skill classification is used as a robustness check. The COVID-19 pandemic is captured with the help of a time dummy variable and also using the Stringency Index. The study estimates the bound testing approach to the autoregressive distributed lag (ARDL) model using quarterly time series data, and the autoregressive moving average with exogenous variable (ARMAX) model using monthly time series data, to understand the nature of the long-run relationship and short-run dynamics amongst the variables of interest. The study establishes the presence of cointegration amongst employment, tourism exports, digitalisation, and other control variables in all four cases – total employment, and low-, medium-, and high-skilled employment. We find tourism exports to have a positive and significant impact on employment, except high-skilled employment. Digitalisation of tourism exports is found to have a significant but negative impact on the total, low-skilled and medium-skilled employment. The COVID-19 pandemic is also found to have a negative and significant impact on total employment in Indonesia, with low-skilled employment being the worst affected

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