ANALYSIS OF FACTORS AFFECTING LABOR ABSORPTION IN EAST KALIMANTAN PROVINCE 2019-2021

Abstract

This study aims to measure the direction and magnitude of the effect of Economic Growth in the Agriculture, Fisheries and Forestry Sector, Economic Growth in the Mining and Quarrying Sector, Economic Growth in the Processing Industry Sector, Economic Growth in the Financial Services and Insurance Sector, and Investment on Labor Absorption in East Kalimantan Province for the 2019-2021 period. The analytical method used in this research is panel data regression analysis. The estimation results show that the Fixed Effect Model (FEM) was chosen as the best estimated model. The FEM estimated model shows that Economic Growth in the Agriculture, Fisheries and Forestry Sector, Economic Growth in the Mining and Quarrying Sector, Economic Growth in the Manufacturing Industry Sector, Economic Growth in the Financial Services and Insurance Sector, and Investment have no effect on Labor Absorption. This result shows that during the period studied there was no significant increase in labor absorption. This research data shows that the increase in labor absorption during the period studied is not stable every year. Since 2020, generally in Indonesia and especially in East Kalimantan Province, several economic sectors have stopped their growth due to the Covid-19 pandemic. As a result, there has been a significant decrease in employment in East Kalimantan Province. However, it is also necessary to be aware of the possibility of an economic development trend that is increasingly biased towards employment because it is increasingly capital intensive.