Analysis of Educated Unemployment Rate in Indonesia: Panel Data Regression Approach

Z. Zur¹

Section:Research Paper, Product Type: Journal-Paper
Vol.7 , Issue.3 , pp.8-15, Mar-2021

Online published on Mar 31, 2021

Copyright © Z. Zur . This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
 

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Abstract :
The equitable distribution of educational facilities throughout Indonesia is not proportional to the increase in fundamental skills needed in the working world. It can be seen from the high level of educated unemployment. This study aims to determine and analyse the effect of labour force quality, foreign direct investment, labour productivity, and provincial minimum wages on the level of educated unemployment in Indonesia using panel data estimation with a fixed effect cross-section weight model method with robust covariance cross-section SUR (PCSE) with a cross-section of 34 provinces and time series for seven years from 2013-2019. This study obtained the data from Statistics Indonesia (BPS). The results showed that the workforce quality and foreign direct investment have negative and significant effects on Indonesia`s educated unemployment rate. Meanwhile, labour productivity has a positive and significant effect on the educated unemployment rate in Indonesia. In contrast to the provincial minimum wage, it does not significantly affect the educated unemployment rate with a confidence level of 95 percent. Simultaneously, all independent variables affect Indonesia`s educated unemployment rate. The coefficient of determination is 88.44 percent, indicating the variation of the educated unemployment rate in Indonesia, which the independent variable of 88.44 percent can explain. In comparison, other factors outside the model explain 11.56 percent.

Key-Words / Index Term :
Educated Unemployment Rate, Workforce Quality, Minimum Wage, Labor Productivity, Foreign Direct Investment, SUR

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