Educated Unemployment in Indonesia: The Effects of Monetary Policy and Trade Opennes

Abstract

This research is intended to know how much the influence of bank credit on educated unemployment both directly and indirectly through trade opennes in Indonesia. This research also examine whether the overlapping generation models prevail in Indonesia, especially in the period in which the monetary authorities apply a disinflation policy. The data used are secondary data that obtained from Central Bureau of Statistics. The unit of analysis are the panel data from 31 provinces in Indonesia (2006-2014). The method of analysis employed is the estimation method of simultaneous equation. The research findings indicate that bank credit has not contributed to absorb educated labor and only enhance the international trade which also not optimal in absorbing educated labor. In addition, overlapping generation models has not yet prevail in Indonesia.