Abstract
Industry sectors in Java Island viewed as high productivity sector, therefore high value-added will be generated from the advantage of this industry that will eventually fastened the creation of economical prosperity. Large and medium Industry have potency to become the most contributed sector on labor absorption of manpower. The purpose of this study was to analyze mapping of Labor absorption in the large and medium industry using Klassen typology analysis and determine the effect of variable Large and Medium Industry, Production Value, Private Investment, and Regional Minimum Wage on employment large and medium industry 6 provinces in Java Island for years 2008-2017. This research is using Klassen Typology and Panel data analysis with Fixed Effect Model (FEM). The result of Klassen typology Analysis indicate, there are 2 provinces in Quadrant I, 1 province in Quadrant II, 1 province in Quadrant III, and 2 provinces in Quadrant IV. The Panel data result shows that Large and Medium Industrial unit and Private Investment have positive and significant impact, while Production Value and Regional Minimum Wage have positive and non significant impact on Labor absorption in the Large and Medium Industry 6 provinces in Java Island for years 2008-2017.
Highlights
Economic development aim to improve the welfare of society and the income per capita of a country
The aim of this research is to mapping of large and medium absorption industrial workers in 6 Provinces of Java during 2008-2017 with Klassen Typology analysis; Determine the effect of the number of business units, production value, private investment, and partial minimum wages on the absorption of large and medium industrial workers in 6 Provinces of Java Island; Factors influence the absorption of large and medium industrial workers in 6 Provinces of Java; and Determine the influence of the number of business units, the value of production, private investment, and the minimum wage on the absorption of large and medium industrial workers in 6 Provinces of Java
Minimum wage coefficient of 0.005376. It means that each Minimum wage is a one percent increase, the labor absorption variable will rise by 0.005376%
Summary
Economic development aim to improve the welfare of society and the income per capita of a country. One supporting factor in economic growth can be seen from the absorption of labor that aims to reduce the number of unemployed and equitable distribution of income. Indonesia is the largest archipelago country in the world, consisting of 5 large islands and 4 islands. One of the islands in Indonesia has the largest population, and the most significant area is Java. The average contribution of the people of Java Island in 2013-2017 is 56.77% of Indonesia's total population. The Increasing number of population can increase the amount of the labor force so that the increasing number of workers must be absorbed
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