More Money, or More Welfare? A Critical Look at THR and Eid Consumption
Mohammad Nur Rianto Al Arif
(Professor at UIN Syarif Hidayatullah Jakarta; Chair of PDM East Jakarta)
One topic that always becomes part of the national conversation every Ramadan is the holiday allowance (THR). THR is not merely additional income; it has evolved into a symbol of hope, a source of happiness, a driver of consumption, and even a perceived indicator of prosperity. When the THR funds enter bank accounts, a sense of relief appears, followed by shopping plans. Shopping centers become crowded, transactions increase, and optimism seems to rise.
Yet behind this euphoria lies a fundamental question: does THR truly improve welfare, or does it merely create a temporary illusion of prosperity?
Each year, the pattern is almost identical. Purchasing power rises sharply ahead of Eid, consumption surges, and economic activity accelerates. However, a few weeks after the holiday passes, many people return to their previous financial condition—sometimes worse, as savings have thinned. The THR is gone, routine expenses continue, and some individuals once again face personal deficits. If welfare is defined as sustainable financial peace of mind, then this seasonal spike deserves scrutiny.
From a regulatory standpoint, THR is a worker’s right. Its purpose is both as appreciation and as assistance in meeting holiday needs. In Indonesia’s social context, Eid is not merely a religious celebration but also a cultural event requiring financial readiness: homecoming travel, new clothes, traditional foods, family gifts, zakat, and charity. In this framework, THR has a rational social foundation.
In practice, however, THR has grown beyond its function as social protection. It has become a driver of national consumption. When THR is disbursed, the retail, transportation, tourism, and e-commerce sectors experience a surge. Banks offer additional credit, pay-later services increase, and various promotions emerge. All capitalize on the same psychological momentum: people feel they have “extra money.”
In reality, THR is not additional income beyond annual earnings but part of total compensation paid in a lump sum. This is where the illusion begins. From a behavioral economics perspective, people tend to treat money differently depending on how they receive it. Monthly salaries are seen as routine income, while THR is often perceived as a free-to-spend bonus. This perception shapes consumption patterns. Items that once seemed expensive now appear reasonable. Spending decisions become more impulsive. Wants gradually turn into perceived needs.
Eid also becomes a stage for social representation. New clothes are viewed as symbols of success. Envelopes for nieces and nephews reflect care. Hampers symbolize relationships. In this situation, THR shifts into a tool of social legitimacy. The problem is that social legitimacy comes at a cost. Lifestyle standards increase year after year, influenced by inflation, social media, and the commercialization of the holiday. Expectations grow faster than income.
The post-Eid phenomenon is rarely discussed. Many admit their financial condition becomes tighter after the holiday. Savings are depleted, unexpected expenses arise, and some fall into consumptive debt. If THR truly increased welfare, financial security should last longer. In reality, its effect is often short-lived.
This means THR does not address the root of welfare issues. True prosperity rests on stable income, prudent financial management, and the ability to control consumption. THR merely adds temporary liquidity.
From a macroeconomic perspective, THR does stimulate consumption growth. Household consumption—the largest component of Indonesia’s GDP—usually rises significantly before Eid. Transportation, tourism, and micro, small, and medium enterprises feel the impact. In the short term, this is positive for growth.
However, seasonal consumption does not automatically strengthen economic foundations. It does not create new productivity, improve workforce quality, or strengthen national savings. Money circulates faster but does not always generate structural progress. Growth that depends heavily on emotional momentum tends to be fragile.
Moreover, not all workers receive THR in equal amounts. Formal workers are protected by regulation, while informal workers often lack certainty. Meanwhile, social expectations around Eid apply to everyone. Here, inequality becomes visible. The illusion of seasonal welfare is felt more strongly by certain groups.
In modern society, success is often measured by purchasing power. The holiday becomes a showcase of buying capacity. Yet true welfare is often linked to the ability to feel content. Unfortunately, the narrative of “enough” is rarely promoted. Advertising encourages impulsive consumption, social media sets new standards, and major discounts create urgency. THR becomes the ammunition to fulfill those impulses.
The solution is not to eliminate THR, as it remains an important worker’s right and economic support. What needs to change is how it is interpreted. Financial literacy should be strengthened before THR disbursement. Ideally, the funds should be allocated proportionally: for necessities, savings, investment, and sharing. The government and companies can use this momentum to promote healthy financial management.
Eid also needs to be reinterpreted. Happiness is not identical to excessive consumption. Returning home does not have to be accompanied by symbols of luxury. The culture of sharing does not have to be excessive. If THR is used to strengthen emergency funds, repay productive debt, or build small assets, it can become a genuine instrument of welfare.
The illusion of prosperity arises when increased liquidity is mistaken for increased welfare. In reality, welfare is a long-term condition: stability, financial security, and the ability to plan for the future. THR provides an opportunity, not a guarantee.
Each year, THR will come again. Each year, shopping centers will be crowded. The question is not whether we may enjoy the fruits of our labor. The question is whether we want prosperity that lasts a few weeks or prosperity that sustains life in the long term.
Seasonal illusions of wellness feel sweet but quickly fade. True prosperity may feel modest, but it endures. The challenge is learning to distinguish between having more money and living more securely.
This article was published in Kompas on Monday, February 20, 2026.