The Effect of Human Capital Expenditure on Labor Productivity in Central Java Province

Nurul Huda Nafi’ Maula and Muhammad Anas ()
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Nurul Huda Nafi’ Maula: Universitas Muhammadiyah Surakarta, Faculty of Economics and Business
Muhammad Anas: Universitas Muhammadiyah Surakarta, Faculty of Economics and Business

A chapter in Proceedings of the International Conference on Economics and Business Studies (ICOEBS-22-2), 2024, pp 798-810 from Springer

Abstract: Abstract Education and health are two essential aspects in improving the quality of human capital because higher education and good health make workers more productive. This study aims to estimate the direction and magnitude of the influence of human capital spending on labor productivity in Central Java Province in 2013–2019 using panel data regression using the Fixed Effects Model (FEM) approach and applying the chain rule method. The results of this study indicate that education spending positively affects the average length of schooling (RLS), and health spending positively impacts life expectancy (AHH). Then, RLS and AHH positively affect labor productivity in Central Java Province. Thus, it is proven that this study has a chain rule. The government expected to evaluate the use of education and health expenditure budgets. So that the RLS can be high and the AHH is also high.

Keywords: Education Spending; Health Spending; RLS; AHH; Labor Productivity; Panel Data; Chain Rule (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_66

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DOI: 10.2991/978-94-6463-204-0_66

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