The Relationship among Socioeconomic Factors in the Western Region and Eastern Region of Indonesia

Abstract

The research aim was to study the influence of industrial development, wages, education, training institutions and MSMEs on unemployment in the western and Eastern regions of Indonesia. Indonesia is can be divided into two regions, western Indonesia and eastern Indonesia to make comparisons regarding economic growth and unemployment. The results of the analysis show that the industrial developments have no influence on economic growth in either the western region or the eastern region. Industrial development has a significant positive influence on unemployment both in Western and Eastern Indonesia. Economic growth has a significant negative influence on unemployment both in Western Indonesia and Eastern Indonesia. Apart from that, wages have an insignificant positive influence on economic growth and unemployment in both Western and Eastern Indonesia. The influence of education on economic growth is positive and significant in Western Indonesia but has no effect in Eastern Indonesia. Furthermore, the effect of education on unemployment is positive and very significant in both regions of Indonesia. On the other hand, training has no effect on economic growth and unemployment in the two regions of Indonesia. Lastly, Micro Small Medium Enterprises (MSMEs) had a positive effect on economic growth and unemployment in western Indonesia but had no influence in western Indonesia