The Impact of Minimum Wages, Gross Regional Domestic Product, and Labor Force Participation Rate on The Employment of Low-Educated Workers in Central Java Province 2019–2024

Azkiya Faiza Zahra, Nenik Woyanti

Abstract


Central Java is the province with the largest labor force in Indonesia, yet the minimum wage set in this region remains relatively low compared to other provinces on the island of Java. This condition is compounded by the fact that the majority of the labor force in Central Java has a low educational background, namely graduates of junior high school (SMP) or below. On the other hand, Central Java has substantial economic potential, reflected in its continuously increasing Gross Regional Domestic Product (GRDP). This study aims to analyze the effect of the District/City Minimum Wage (UMK), GRDP, and the Labor Force Participation Rate (TPAK) on the employment absorption of low-educated workers in Central Java Province during the period 2019–2024. This study uses cross-sectional data comprising 35 regencies/cities in Central Java combined with time-series data from 2019 to 2024. The method employed is panel data regression using the Fixed Effect Model (FEM), with data processed using EViews 10. The results show that the UMK has a partially negative and significant effect on the employment absorption of low-educated workers, GRDP has no significant partial effect on the employment absorption of low-educated workers, and TPAK has a partially positive and significant effect on the employment absorption of low-educated workers. Simultaneously, UMK, GRDP, and TPAK have a significant effect on the employment absorption of low-educated workers.

Abstrak: Jawa Tengah merupakan provinsi dengan jumlah angkatan kerja terbesar di Indonesia. Namun, upah minimum yang ditetapkan di wilayah ini masih relatif rendah dibandingkan dengan provinsi-provinsi lain di Pulau Jawa. Kondisi tersebut diperparah oleh kenyataan bahwa sebagian besar angkatan kerja di Jawa Tengah memiliki tingkat pendidikan yang rendah, yaitu lulusan Sekolah Menengah Pertama (SMP) atau di bawahnya. Di sisi lain, Jawa Tengah memiliki potensi ekonomi yang cukup besar, yang tercermin dari Produk Domestik Regional Bruto (PDRB) yang terus meningkat.

Penelitian ini bertujuan untuk menganalisis pengaruh Upah Minimum Kabupaten/Kota (UMK), Produk Domestik Regional Bruto (PDRB), dan Tingkat Partisipasi Angkatan Kerja (TPAK) terhadap penyerapan tenaga kerja berpendidikan rendah di Provinsi Jawa Tengah selama periode 2019–2024. Penelitian ini menggunakan data panel yang menggabungkan data cross-section dari 35 kabupaten/kota di Jawa Tengah dengan data time series selama periode 2019–2024. Metode analisis yang digunakan adalah regresi data panel dengan pendekatan Fixed Effect Model (FEM), sedangkan pengolahan data dilakukan menggunakan perangkat lunak EViews 10.

Hasil penelitian menunjukkan bahwa secara parsial, UMK berpengaruh negatif dan signifikan terhadap penyerapan tenaga kerja berpendidikan rendah. PDRB tidak berpengaruh signifikan secara parsial terhadap penyerapan tenaga kerja berpendidikan rendah, sedangkan TPAK berpengaruh positif dan signifikan secara parsial terhadap penyerapan tenaga kerja berpendidikan rendah. Secara simultan, UMK, PDRB, dan TPAK berpengaruh signifikan terhadap penyerapan tenaga kerja berpendidikan rendah

Keywords


Labor; Low-Educated; Minimum Wage; Gross Regional Domestic Product

Full Text:

PDF

References


Alatas, V., & Cameron, L. A. (2008). The impact of minimum wages on employment in a low-income country: A quasi-natural experiment in Indonesia. Industrial and Labor Relations Review, 61(2), 201–223. https://doi.org/10.1177/001979390806100204

Badan Pusat Statistik. (2024a). Upah Minimum Regional/Propinsi (Rupiah). https://www.bps.go.id/id/statistics-table/2/MjIwIzI=/upah-minimum-regional-propinsi.html.

Becker, G. S. (1993). Human Capital: a Theoretical and Empirical Analysis with Special Reference to Education (3rd ed.). The University of Chicago Press.

Borjas, G. J. (2013). Labor Economics 6th Edition. In McGraw-Hill (6th ed., pp. 196–211).

Doughlas Reiner. https://doi.org/10.1093/ajae/90.3.865-b

BPS. (2024). Berita Resmi Statistik No. 83/11/Th. XXVVII. https://www.bps.go.id/id/pressrelease/2024/11/05/2373/tingkat-pengangguran-terbuka--tpt--sebesar-4-91-persen-.html

Case, K. E., & Fair, R. C. (2007). Prinsip-Prinsip Ekonomi (8th ed.). Erlangga.

Del Carpio. (2015). Do Minimum Wages Affect Employment? Evidence from The Manufacturing Sector In Indonesia. IZA Journal of Labor and DevelopmentDel, 4(1). https://doi.org/10.1186/s40175-015-0040-8

Ghozali, I. (2018). Aplikasi Analisis Multivariate dengan Program IBM SPSS 25 (9th ed.). Badan Penerbit Universitas Diponegor.

Gujarati, D. N., & Poter. (2009). Basic Econometrics (Fifth). The McGraw-Hill Series.

Hohberg, M., & Lay, J. (2015). The impact of minimum wages on informal and formal labor market outcomes : evidence from Indonesia. IZA Journal of Labor & Development. https://doi.org/10.1186/s40175-015-0036-4

Jung, S., Lee, J., Hwang, W., & Yeo, Y. (2016). Growth versus Equity : A CGE Analysis for Effects of Factor-Biased Technical Progress on Economic Growth and Employment. Economic Modelling, April, 1–15. https://doi.org/10.1016/j.econmod.2016.10.014

Maulidina, M. A., & Devanto, S. P. (2018). Pengaruh Upah Minimum terhadap Penyerapan Tenaga Kerja Berpendidikan Rendah Di Jawa Timur. Jurnal Ilmiah Mahasiswa Fakultas Ekonomi Dan Bisnis, 1–19.

Simanjuntak, P. J. (1985). Pengantar Ekonomi Sumber Daya Manusia. Lembaga Penerbit Fakultas Ekonomi Universitas Indonesia.

SMERU. (2001). Wage and Employment Effects of Minimum Wage Policy in the Indonesian Urban Labor Market. The SMERU Research Institute, 60(October), 1–75.

Todaro, M. P. ., & Smith, S. C. . (2014). Economic Development, 12th Edition (The Pearson Series in Economics) -Prentice Hall (2014) (11th ed.). Addison-Wesley.

Tridiana, C. (2018). Dampak Upah Minimum terhadap Probabilitas Keluar dari Sektor Formal.

Jurnal Ekonomi Dan Pembangunan Indonesia, 18(3). https://doi.org/10.21002/jepi.2018.19 Wen, K. J., & Sieng, L. W. (2023). Minimum Wage and Employment of Malaysian Low-skilled

Workers. Malaysian Journal of Economic Studies, 60(2), 255–273. https://doi.org/10.22452/MJES.vol60no2.6

World Bank. (2025). Population Total. World Development Indicator. https://databank.worldbank.org/source/world-development-indicators/Series/SP.POP.TOTL




DOI: https://doi.org/10.24167/jemap.v9i2.15759

Refbacks

  • There are currently no refbacks.


e-ISSN 2622-612X | View My Stats