DETERMINANTS OF OPEN UNEMPLOYMENT RATE IN CENTRAL JAVA PROVINCE 2017-2023

Abstract

The Open Unemployment Rate in Central Java shows significant disparities across its 35 regencies and cities. This study aims to analyze the influence of Total Population, Human Development Index, Regency/City Minimum Wage, Domestic Investment, and Foreign Investment on the Open Unemployment Rate across these regions. Employing a quantitative approach with panel data regression analysis over a seven-year period, the findings reveal that Total Population and Regency/City Minimum Wage have a significant positive effect on the Open Unemployment Rate, while the Human Development Index has a significant negative effect. Conversely, Domestic Investment and Foreign Investment do not significantly affect the unemployment rate. These results suggest that unemployment reduction efforts should prioritize population control, enhancement of human development, and strategic implementation of minimum wage policies. Furthermore, it is important for local governments to evaluate the actual impact of investment inflows on labor absorption to ensure alignment with employment goals and regional economic development.