An Analysis on Factors Influencing Labor Demand of Industrial Sector in Indonesia In 2010-2015
Abstract
Indonesia is undergoing a change in economic sector of the economy that
has been previously dominated by agricultural sector into the economy of
industrial sector and services. The industrial sector is one of the sectors which
plays an important role and has contributed significantly to the development in
Indonesia. The industrial sector is absorbing a lot of labor and can reduce
unemployment, but as time goes by existing data show that the amount of labor in
the industrial sector is decreasing each year. The decline in labor demand may
increase employment problems in Indonesia such as the increasing of
unemployment, poverty and crime because the high living costs. Therefore, this
study tried to analyze the existence of any factors that influence the demand for
labor especially in the industrial sector in Indonesia.
The data used in this research is secondary data from BPS and Central
Bank 2010-2015, the data include of the gross domestic product in constant price,
minimum wage, government spending, investment, and money supply. The
analysis used in this study is panel data analysis with fixed effect model.
The results of the analysis shows that the demand for labor in the
industrial sector has been significantly influenced by GDRP, and government
spending. Government spending give negative impact toward labor demand, while
GDRP give positive impact toward labor demand in industrial sector. Investment,
minimum wage and money supply not significantly affect the labor demand of
industrial sector in Indonesia.
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- Economics [2138]