Determinants of Youth Labour Absorption in Indonesia

Abstract

This study aims to determine how: the provincial minimum wage affects youth labour absorption in Indonesia; the regional economic conditions affect youth labour absorption in Indonesia; the level of education affects youth labour absorption in Indonesia; the effects of elderly people working on youth labour absorption in Indonesia; and the type of work elderly people do affects youth labour absorption in Indonesia. The data used in this study issecondary data from the Indonesian Central Bureau of Statistics (BPS), namely Sakernas of 2008-2018 with panel data type. Data was analysed using panel data regression analysis. The results show that several variables have a significant effect on employment opportunities for youth labour, namely the Provincial Minimum Wage (UMP), the Basic Education Level of Young Workers, the Secondary Education Level of Young Workers, and the Higher Education Level of Young Workers. These mean that there is no trade off between elderly and young workers. It could be because of the job positions in these two age groups are likely to be different, so that there is no positions’ substitution for elderly and young workers, and the positions entered by these elderly workers are positions that require a fairly high work experience.