Sebelas Maret International Conferences, The 1st INCREDIBLE

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Analysis of Factors Affecting the Unemployment Rate in Java Island 2010-2019
Adi Wijaya, Nugroho Saputro

Building: Parallel Session 2
Room: G
Date: 2020-10-27 02:45 PM – 04:00 PM
Last modified: 2020-10-19

Abstract


This study aims to analyze the factors that influence the unemployment rate in Java for the period 2010-2019. The dependent variable in this study is the unemployment rate, while the independent variable consisting of the provincial minimum wage, education level, total population, GRDP and productive age population are included as control variables. The data used is secondary data obtained from BPS Indonesia. The analytical method used in this study uses the Generalized Method of Moment Arellano Bond (GMM) which consists of 6 provinces in Java Island with a vulnerable period of 2010-2019. The results of this study indicate that the minimum wage has no significant effect on unemployment, education level and population have a significant negative effect on unemployment, while the number of productive age population and GDRP have a positive and significant effect on unemployment. The suggestions that the author can convey are: (1) the government needs to be wise in setting the provincial minimum wage in order to protect workers' rights, (2) the government needs to increase investment in education in the form of scholarships, (3) the government needs to improve the quality of human resources by providing job training and creating new jobs by holding entrepreneurial training programs, (4) business actors, both government and private, must create labor-intensive production processes and limit population migration.

Keywords : Unemployment, Minimum Wage, level of education, Population, GRDP