Open Unemployment in The Province of Bali

Abstract

The high level of open unemployment in the districts/cities of Bali Province is not in line with the high minimum wage applied and the lower level of labor force participation. This study aims to analyze both the short and long term district minimum wages (UMK), gross regional domestic product (GRDP), labor force participation rates (LFPR) and education on open unemployment in all districts/cities of Bali Province for the period of 2006 to 2017. This study uses error correction model (ECM) analysis techniques. The research findings showed that in the short term the UMK and TPAK had a negative and significant effect on open unemployment; in the long run UMK, GRDP, and TPAK had a positive effect on open unemployment; the education elasticity had the greatest effect on open unemployment compared to other variables. This fact demands the Provincial Government of Bali to be more proactive in improving vocational education so that open unemployment will decrease.