Analysis of Labor Absorption in the Agricultural Sector in Indonesia

Tatik Nur Tri Ani and Nur Hidayah ()
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Tatik Nur Tri Ani: Muhammadiyah University of Surakarta, Faculty of Economics and Business
Nur Hidayah: Muhammadiyah University of Surakarta, Faculty of Economics and Business

A chapter in Proceedings of the International Conference on Economics and Business Studies (ICOEBS-22-2), 2024, pp 160-170 from Springer

Abstract: Abstract This study examines the factors that affect the absorption of labor in the agricultural sector. The variables in this study consisted of the Gross Regional Domestic Product (GRDP) of the Agricultural Sector, Farmers Exchange Rate (FER), Domestic Investment, and the Provincial Minimum Wage (PMW). This research method uses panel data regression analysis with Fixed Effects Model (FEM) to analyze panel data from 2019 to 2021 in 34 provinces in Indonesia. In this research, we found that the Farmer’ Exchange Rate has a negative and significant influence and the Provincial Minimum Wage has a positive and significant influence on the absorption of labor in agricultural sector. Meanwhile, the Gross Regional Domestic Product of the Agricultural Sector and Domestic Investment variable have no influence on the absorption of labor. This study is the first study to examine the influence of gross regional domestic product, farmers exchange rates, provincial minimum wages, and domestic investment on absorption of labor in agricultural sector in 34 provinces in Indonesia from 2019 to 2021.

Keywords: Absorption of Labor Agricultural Sector; Farmers Exchange Rate; Provincial Minimum Wage; Fixed Effects Model (FEM) (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-204-0_14

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DOI: 10.2991/978-94-6463-204-0_14

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