Absorption of Indonesian Workers in the Industrial Sector by Significant Province

Abstract

Using panel data from 2010-2016 from the national and provincial Statistic Agency, this study aims to formulate a model of industrial sector employment that is generated by the Gross Domestic Regional Product of the industrial sector, per capita Gross Domestic Regional Product and provincial minimum wages and to identify the magnitude of the influence and contribution. The analysis used is explorative analysis of data mining (data mining) and econometric analysis of panel data modeling. From the results of the analysis, the right model to explain labor absorption in the industrial sector is the fixed effect model, and from 33 (thirty-three) pieces of the provincial fixed effect model, 16 (sixteen) provinces were identified as statistically significant at the 0.05 level. Of the sixteen significant provincial models, if grouped according to the value of intercept values, they can be grouped into three groups, namely the first group with relatively high intercept values, there are 5 (five) provinces, including West Java province; Central Java; East Java; Banten; and DKI Jakarta. The second group with intercept value is 6 (six) provinces, namely North Sumatra province; South Kalimantan; Lampung Bali; Riau islands; and Yogyakarta. The third group with relatively low intercept values is 5 (five) provinces, namely the province of South Sulawesi; West Nusa Tenggara; South Sumatra; Boast; and East Nusa Tenggara. Keywords—fixed effect model; employment; Gross Domestic Regional Product industry sector; provincial minimum wage