Abstract

This study aims to confirm the existence of Okun's coefficients in Indonesia. Authors conducted panel data of 34 provinces in Indonesia for the period from 2014 to 2019, obtained from the Central Bureau of Statistics. The data were analyzed by using the panel data model and Panel Granger Causality. The Panel Granger causality analysis results show that there was one-way causality between the economic growth and the unemployment. It was caused by several influencing factors, such as education level, population, and employment opportunities. Based on the Fixed Effect Model and Panel Granger Causality results, authors conclude that Okun's Law has not been proven for 34 provinces in Indonesia.

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