The Effect of GRDP, Foreign Investment, and Unemployment Rate on Labor Absorption in Central Java in 2020-2024

Rossalien Umaiya; Wenny Restikasari

doi:10.55927/fjas.v5i7.78

Authors

Rossalien Umaiya Universitas Negeri Surabaya
Wenny Restikasari Universitas Negeri Surabaya

DOI:

https://doi.org/10.55927/fjas.v5i7.78

Keywords:

Gross Regional Domestic Product, Foreign Investment, Unemployment Rate, Labor Absorption, Panel Data

Abstract

The capacity of the labor market to absorb the workforce continues to represent a strategic issue in Central Java Province. This study aims to analyze the effects of Gross Regional Domestic Product, Foreign Investment, and Unemployment Rate on Labor Absorption during 2020–2024. The study operationalized a quantitative analytical strategy in which panel regression estimation was carried out using secondary data officially published by Statistics Indonesia (BPS) for 35 district/cities in Central Java. The results show that GRDP and FDI have a positive and significant effect on labor absorption, while the Unemployment Rate has a negative but insignificant effect. The simultaneous test indicates that all independent variables significantly affect labor absorption. These findings suggest that economic growth and investment are important factors in expanding employment opportunities in Central Java.

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