Determinants of Unemployment for Sustainable Development in Indonesia
Iwan Setiawan (a*), Fifi Afiyanti Tripuspitorini (a), Nafisah Ruhana a)

a) Accounting Department, Politeknik Negeri Bandung, Indonesia
*iwan.setiawan[at]polban.ac.id

Abstract

Unemployment is an economic problem that has a negative impact on economic, social and psychological dimensions. Efforts to overcome unemployment are part of sustainable development goals. The research aims to find the determining factors for open unemployment rates in Indonesia. It is hoped that the research findings will become a solution to overcome the problem of open unemployment in Indonesia. The research was carried out using a multiple regression analysis model with the Ordinary Least Square (OLS) estimation method. Research data uses time series data for the monthly period 2016-2023. The research results show that an increase in the workforce, economic growth and foreign direct investment have a significant effect on reducing the open unemployment rate. Increasing minimum wages and bank credit have a significant effect on increasing open unemployment rates in Indonesia. Efforts to reduce unemployment are carried out through optimizing economic growth. Economic growth is achieved by using appropriate technology and involving a lot of human resources. Economic growth has the potential to increase business capacity and company profits. Through optimal economic growth, increasing the minimum wage will improve workers welfare, encourage increased company capacity and reduce open unemployment in Indonesia.

Keywords: unemployment, economic growth, minimum wage, foreign direct investment

Topic: Sustainable development