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Employment absorption in manufacturing industry: Yogyakarta case

Author

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  • Aurora Indra Putri

    (Widya Mulya Consulting, Yogyakarta)

Abstract

Unemployment has been a main problem in economic development, especially in developing countries. Unemployment stems from the inability of the economy to absorb the growing labor force. This paper investigates factors influencing absorbtion of labor in Yogyakarta manufacturing industries. Variables hypothesized to affect the absorbtion are wage, labor productivity, non-wage spending, and output of production. It collects data from Indonesia Centre Bureau of Statistics, and uses panel data regression, namely common effect approach, to estimate the model. Employing Eviews software package, it finds that wage, labor productivity, and output production significantly influence labor absorption. However, non-wage spending does not significantly influence the absorption.

Suggested Citation

  • Aurora Indra Putri, 2012. "Employment absorption in manufacturing industry: Yogyakarta case," Economic Journal of Emerging Markets, Universitas Islam Indonesia, vol. 4(2), pages 199-209, April.
    • Handle: RePEc:uii:journl:v:2:y:2010:i:2:p:199-209
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    References listed on IDEAS

    as
    1. Bertola, Giuseppe & Blau, Francine D & Kahn, Lawrence, 2001. "Comparative Analysis of Labour Market Outcomes: Lessons for the US from International Long-Run Evidence," CEPR Discussion Papers 3023, C.E.P.R. Discussion Papers.
    2. David H. Autor & Mark G. Duggan, 2003. "The Rise in the Disability Rolls and the Decline in Unemployment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(1), pages 157-206.
    3. Chinhui Juhn & Simon Potter, 2006. "Changes in Labor Force Participation in the United States," Journal of Economic Perspectives, American Economic Association, vol. 20(3), pages 27-46, Summer.
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    Cited by:

    1. Dio Caisar DARMA & Jati KASUMA & Muhammad IKBAL, 2020. "Employment Absorption: Elasticity in the Industry and Services Sector in Indonesia," Management and Economics Review, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 5(1), pages 125-135, June.

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    More about this item

    Keywords

    Labor absorption; wage; labor productivity; non-wage spending;
    All these keywords.

    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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