Abstract

Labor absorption is an important factor in supporting economic development through national income. The low level of employment is still a problem in various regions in Indonesia, especially in Central Java Province. The problem of employment, can be overcome by maximizing the factors that affect the increase in labor absorption. Therefore, it is necessary to analyze the factors that are thought to affect the increase in labor absorption. This study aims to analyze the factors that influence labor absorption in Central Java Province. This study uses a descriptive quantitative approach with a panel data regression model. The best model selection test used is the Chow test, Hausman test, and Lagrange Multiplier test (LM) Test which was carried out using the Eviews 9 software. This study uses cross section data from 35 districts/cities in Central Java Province and time series data on the number of workers, labor force, unemployment, minimum wages, and GRDP of each district/city for the 2015-2020 period. The results of the discussion show that simultaneously and partially the number of workers, the number of the workforce, the number of unemployed, the minimum wage, and GRDP have an effect on the absorption of labor in Central Java Province.

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