Abstract
Abstract: Islamic banking is present in the banking industry, as a means of conducting transactions and is expected to contribute more broadly in the context of development. Islamic banking is not just a contribution to economic growth but also contribute to the problems of employment creation and the growth of unemployment. The main objective of this study is to analyze the role of Islamic banking to the improvement of people's welfare as measured by a decrease in the unemployment rate in Indonesia. The study was conducted using explanatory method, applying simultaneous regression estimation techniques with Two Stage Least Square method (TSLS) using data from the period 1992-2012. The findings in this study is Islamic banking has not contributed to the decline in the unemployment rate. The role of Islamic banking in lowering the unemployment rate is lower than with conventional banking. Monetary policy instruments, the number of workers, minimum wage policy and economic growth is another factor which contributed to the circumstances of the unemployed in Indonesia. Keywords: Finance, credit, monetary policy, economic growth, minimum wage
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