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Central Java Economic Growth in Supporting Sustainable Development (Empirical Study of the Impact of Labor Spillover in 36 Regencies / Cities)
Dr. E. Caroline, SE, MSi; Hamboro Widodo, ST; Dr. Moh. Debby Rizani, MT

Universitas Sultan Fatah Demak


Abstract

The impact of the Central Java Workforce Spillover is one of the priorities for sustainable development in Central Java Province, and is the 8th goal of the SDGs, namely promoting sustainable and inclusive economic growth, employment and decent work for all. The implementation of the ASEAN Economic Community collaboration brings the impact of open labor mobility between ASEAN countries. Indonesia has become part of the ASEAN Economic Community. Central Java Province is one of the 34 provinces in Indonesia. The total labor force of Central Java Province in 2018 was 26.06 million with a total workforce of 17, 18 million; open unemployment 823 thousand is one reason workers migrate labor. Other reasons workers migrate to other regions are lack of employment in the area of origin, poverty that occurs in the area of origin, low wages in the area of origin. Labor is a driving factor for the creation of economic growth through labor productivity. A workforce with a high level of education, and an adequate level of skills can increase work productivity, which in turn will increase economic growth. Workers with low levels of education, and low levels of productivity will reduce economic growth through decreasing levels of work productivity. Labor is also a problem and issues that must be discussed. This study aims to analyze the impact of labor spillover in Central Java Province. This research method uses the Euclidean Distance spatial weight matrix to calculate the Spatial Autoregressive Model with fixed effects, and the Spatial Error Model with fixed effects. This study uses spatial panel data from 2004 to 2018 from 34 districts / cities in Central Java Province. This study developed a growth model from Mankiw et al (1992), Moretti (2004) by considering spatial impact. The spatial impact model of this study adopted from Lesage and Pace (2010). The conclusions of this study are the results of SAR calculations with fixed efficacy based on that Spatial rho 9 percent means that if Central Java Province grows 9 percent it will affect 34 districts / cities in Central Java Province. Based on the results of SEM calculations with fixed effects, the Lambda value is positive and significant at 1 percent. This means that there is economic growth between regencies / cities in Central Java Province. This means that economic growth in Central Java Province is influenced by the value of capital, labor with spatial residuals from 34 neighboring regencies / cities, and the same characteristics

Keywords: Economic growth, sustainable development, labor spillover

Topic: Sustainable Development

Link: https://ifory.id/abstract/aYuH8jyCknEP

Conference: The 1st International Conference on Environment, Sustainability Issues and Community Development (INCRID 2019)

Plain Format | Corresponding Author (Caroline Caroline)

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