Analysis of The Effect of Unemployment and Employment on Indonesia's State Income
DOI:
https://doi.org/10.65886/ijde.v1i1.7Keywords:
Unemployment Rate, Labor Participation, National income, Economic Growth, Labor ProductivityAbstract
This study aims to analyse the effect of the unemployment rate and labour participation on Indonesia's national income. The underlying problem is the importance of labour market dynamics in influencing economic performance, especially in developing countries such as Indonesia, where the unemployment rate and labour force structure are still crucial issues. The novelty of this study lies in its specific focus, which integrates unemployment and labour force data to measure their direct impact on national income. This study uses the linear regression method to identify the relationship and measure the effect of these variables. The results show that the unemployment rate has a negative correlation to national income, while an increase in labour participation contributes positively. The conclusion of this study emphasises that policies aimed at reducing unemployment and increasing labour productivity are essential to boost Indonesia's economic growth.
Downloads
References
Economy, P., Level, T., Open, P., Manado, D. I. K., Runturambi, A. P., Rotinsulu, T. O., Niode, A. O., Development, J. E., Economy, F., & Ratulangi, U. S. (2024). No Title. 24(2), 97–108.
Indrasetianingsih, A., & Wasik, T. K. (2020). Panel Data Regression Model to Identify Factors Affecting Poverty Level in Madura Island. Gaussian Journal,9 (3), 355-363. https://doi.org/10.14710/j.gauss.v9i3.28925
Mifrahi, M. N., & Darmawan, A. S. (2022). Analysis of the open unemployment rate in Indonesia before and during the COVID-19 pandemic. Journal of Economic and Financial Policy,1 (1), 111-118. https://doi.org/10.20885/jkek.vol1.iss1.art11
Press, T. M. I. T., & Journal, T. Q. (2010). A Contribution to the Theory of Economic Growth Author(s): Robert M. Solow Source: The Quarterly Journal of Economics, Vol. 70, No. 1 (Feb., 1956), pp. 65-94 Published by: The MIT Press Stable URL: http://www.jstor.org/stable/1884513. Growth (Lakeland), 70(1), 65–94.
Schumpeter, J. A., & Keynes, J. M. (1936). The General Theory of Employment, Interest and Money. Journal of the American Statistical Association,31 (196), 791. https://doi.org/10.2307/2278703
Suhandi, Hendra Wijayanto, & Samsul Olde. (2020). Dynamics of Employment and Unemployment Problems in Indonesia. Journal of Bina Bangsa Ekonomika,13 (1), 85-94. https://doi.org/10.46306/jbbe.v13i1.33
Kurniawan, R. (2016). Regression analysis. Prenada Media.
Ningsih, S., & Dukalang, H. H. (2019). Application of interval successive method in multiple linear regression analysis. Jambura Journal of Mathematics, 1(1), 43-53.
Padilah, T. N., & Adam, R. I. (2019). Multiple linear regression analysis in estimating rice crop productivity in Karawang Regency. FIBONACCI: Journal of Mathematics and Mathematics Education, 5(2), 117-128.
Mayasari, F., & Mahinshapuri, Y. F. (2022). The Effect of Inflation on Economic Growth in Indonesia. JEB17: Journal of Economics and Business, 7(02), 119-132. https://doi.org/10.30996/jeb17.v7i02.7362
Mouren, V., Lutherani Ch. P, A., & Tumangkeng, S. Y.. (2022). The Effect of Education Level, Economic Growth and Population on Unemployment in North Toraja Regency. Journal of Efficiency Scientific Periodicals, 22(5), 133-144.
Porter, D. C., Burr Ridge, B., Dubuque, I., New York San Francisco St. Louis Bangkok Bogotá Caracas Kuala Lumpur Lisbon London Madrid Mexico City Milan Montreal New Delhi Santiago Seoul Singapore Sydney Taipei Toronto, I., & Gujarati, D. N. (1970). About the Authors and the Republic of South Korea.
Sitepu, E. (2022). Analysis of Cash Ratio, Firm Size and Return on Assets that Influence Dividend Payout Ration of Soe Companies Listed on the Indonesia Stock Exchange. International Journal of Applied Finance and Business Studies, 9(4), 133-140. https://doi.org/10.35335/ijafibs.v9i4.37
Tini Febriani, Salman Allamsa, Widi Anggraeni, & Muhammad Kurniawan. (2024). The Effect of Economic Growth and Unemployment on Poverty in South Sumatra Province in 2019-2023. Sharia Financial Economics and Tax Accounting, 1(3), 101-114. https://doi.org/10.61132/eksap.v1i3.192
Keynes, J. M. (1936). The General Theory of Employment Terest and Money. Macmillan and Company.
Indayani, S., & Hartono, B. (2020). Analysis of unemployment and economic growth as a result of the covid-19 pandemic. Journal of Perspective, 18(2), 201-208.
Porter, M. E., & Van der Linde, C. (1970). The Competitive Advantage of Nations. Journal of Business Strategy, 12(3), 5-16.
Todaro, M. P., & Smith, S. C. (2015). Economic Development (12th ed.). Pearson Education Limited.
Wooldridge, J. M. (2016). Introductory Econometrics: A Modern Approach (6th ed.). Cengage Learning.
Solow, R. M. (1956). A Contribution to the Theory of Economic Growth. Quarterly Journal of Economics, 70(1), 65-94.
Keynes, J. M. (1936). The General Theory of Employment, Interest, and Money. Palgrave Macmillan.
Adam, S. (1776). *The Wealth of Nations*. W. Strahan and T. Cadell.
Schumpeter, J. A. (1934). The Theory of Economic Development. Harvard University Press.
Mankiw, N. G. (2019). Principles of Economics (8th ed.). Cengage Learning.
Febriani, E., et al. (2024). Determinants of Economic Growth in Indonesia. International Journal of Economics and Finance, 12(4), 45-67.
Suhandi, W., et al. (2020). Employment Trends and Economic Growth in ASEAN. Asian Economic Journal, 34(2), 112-127.
Mouren, B., et al. (2022). The Role of Education in Reducing Unemployment. European Economic Review, 132, 102-115.
Indrasetianingsih, A., & Wasik, S. (2020). Poverty and Employment in Rural Areas. Journal of Development Studies, 58(5), 889-902.
Pieter, M., et al. (2016). Economic Growth and Poverty Reduction: Evidence from Manado. Journal of Economic Perspectives, 29(3), 45-59.
Ghozali, I. (2013). Multivariate Analysis with SPSS. Diponegoro University Publishing Agency.
Press, W., & Journal, R. (2010). Labour Market Inequalities: Evidence from Developing Economies. Review of Economic Studies, 67(1), 32-48.
Mifrahi, D., & Darmawan, A. (2022). Analysis of Employment Absorption in Indonesia. Asian Journal of Labor Economics, 41(3), 219-234.
Mayasari, I., & Mahinshapuri, R. (2022). Fiscal Policies and Economic Development. Global Economic Policy Journal, 38(2), 67-81.
Ummah, A. (2019). The Dynamics of Unemployment in Emerging Markets. Journal of Economic Studies, 42(7), 145-156.
Seto, A. (2019). The Impact of Labor Force Participation on Economic Growth. Journal of Labor Economics, 29(4), 523-542.
Economy, A., et al. (2024). A Panel Data Approach to Poverty Analysis in Southeast Asia. Journal of Southeast Asian Economies, 42(1), 98-122.
Mouren, B., et al. (2022). The Role of Technological Advancements in Employment Creation. Technology and Economics Quarterly, 45(3), 78-95.
Porter, M. (1990). The Competitive Advantage of Nations. Harvard Business Review, 68(2), 73-93.
Chinn, M. D., & Ito, H. (2006). Capital Account Liberalization and Economic Growth. Journal of Development Economics, 81(1), 163-192.
Angrist, J. D., & Pischke, J. S. (2009). Mostly Harmless Econometrics: An Empiricist's Companion. Princeton University Press.
Heckman, J. J. (2000). Causal Parameters and Policy Analysis in Economics. Economic Journal, 110(460), 313-334.
Blanchard, O. J., & Katz, L. F. (1999). Wage Dynamics: Reconciling Theory and Evidence. American Economic Review, 89(2), 69-74.
Feldstein, M. (2008). Did Wages Reflect Growth in Productivity? Journal of Policy Modeling, 30(4), 591-594.
Krueger, A. B., & Meyer, B. D. (2002). Labor Supply Effects of Social Insurance. Handbook of Public Economics, 4, 2327-2392.
Card, D., & DiNardo, J. E. (2002). Skill-Biased Technological Change and Rising Wage Inequality. Journal of Labor Economics, 20(4), 733-783.
Piketty, T., & Saez, E. (2003). Income Inequality in the United States, 1913-1998. Quarterly Journal of Economics, 118(1), 1-39.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2025 Nadin Putri Amilia, Nanda Nor Rohmah, Nur Wan Nis, Nikki Aurista Br Ginting, Novi Wulandari
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
