STRUCTURAL CHANGE, ECONOMIC GROWTH, AND EMPLOYMENT OPPORTUNITIES IN INDONESIA; A Simultaneous Approach
DOI:
https://doi.org/10.61841/eh4pe131Keywords:
economicgrowth, structuralchange, employmentAbstract
The purpose of this study is to analyze the relationship between structural change, economic growth, and employment in Indonesia. The analytical method uses a dissimultaneous regression model consisting of three equations where economic growth, structural change, and employment are treated as endogenous variables and include three (3) exogenous variables, namely investment, wage, and education. From the identification test, it is known that the equation of employment is exactly identified and then estimated using the indirect least squares (ILS) method, while 2 other sareover-identified equations are then estimated using a two-stage least squares (TSLS) method. The results showed that: 1) Economic growth is positively and significantly influenced by employment and investment; 2) Employment is positively and significantly influenced by economic growth and structural change, while the wage rate has a negative effect; 3) structural change is positively and significantly influenced by economic growth and the advancement of education. Important recommendations of these findings are: 1) expansion of employment should be more focused on efforts to encourage productive investments with labor-intensive technologies; 2) increased investments must be accompanied by improvement of the level of education and improving the quality of labor; 3) the process of structural change must be maintained in the direction of employment transformation through the development of labor-intensive industrial and service sectors.
Downloads
References
[1] Akhmetova, S.O., Suleimenova, M.S., Rebezov, M.B. 2019. Mechanism of an improvement of business processes management system for food production: case of meat products enterprise. Entrepreneurship and Sustainability Issues, 7(2), 1015-1035. http://doi.org/10.9770/jesi.2019.7.2(16)
[2] Bachmann, Ronald and Burda, Michael C. 2007, “Sectoral Transformation, Turbulence, and Labor Market Dynamics in Germany”, Ruhr Economic Papers, Dortmun: Ruhr-Universität Bochum (RUB), Department of Economics
[3] Chenery, Holis, 1979, Structural Change and Development Policy, Oxford: Oxford University Press.
[4] Cuadrado, Francisco Alvarez & Poschke, Markus, 2009, “Structural Change out of Agriculture: Labor Push versus Labor Pull”, IZA DP. No. 4247, Bonn: Iza
[5] Dornbusch R & Fischer S, 1997, Makroekonomi, Edisi Keempat, Alih Bahasa J Mulyadi. Jakarta: Penerbit Erlangga.
[6] Grosben, Erical L & Potter, Simon, 2003, “Has Structural Change Contributed to a Jobless Recovery?”, Current Issues in Economics and Finance Vol. 9, No. 8, New York: Federal Reserve Bank of New York
[7] Groshen, Erica L., and Potter, Simon, 2003, “Has Structural Change Contributed to a Jobless recovery?”, Current Issues in Economics and Finance Vol. 9 No. 8/2003, New York: Federal Reserve Bank of New York
[8] Gujarati, D.N. 2003. Basic Econometrics, Fourth Edition. New York: McGraw-Hill, Inc.
[9] Islam, M. A., Jantan, A. H., Hunt, A., Rahman, Md. F., Abdullah, M. M. 2019. Exploration of barriers faced by female graduate entrepreneurs in Bangladesh. Entrepreneurship and Sustainability Issues, 7(2), 1000-1014. http://doi.org/10.9770/jesi.2019.7.2(15)
[10] Janissen, Brett et al, 1988, “Aspects of Structural Change in Australia”, Research Report, Canberra: Productivity Commission
[11] Jhingan, M. L, 2007, Ekonomi Pembangunan dan Perencanaan, Jakarta: Penerbit PT. Radja Grafindo Persada
[12] Mankiw, N.G., 2003. Teori Makroekonomi. Edisi Kelima. Jakarta: Penerbit Erlangga.
[13] Mudrajat Kuncoro, 2006. Ekonomika Pembangunan: Teori, Masalah, dan Kebijakan. Yogyakarta: Penerbit AMP YKPN.
[14] Ranis, Gustav, 2004, ”Labor Surplus Economies”, Center Discussion Paper No. 900, New Haven: Economic Growth Center Yale University
[15] Salem, M., Shawtari, F., Shamsudin, M., & Hussain, H. I. (2018), The Consequences of Integrating Stakeholders’ Engagement on Sustainable Development (Environmental Perspectives), Sustainable Development, 26 (3), 255-268.
[16] Sadono Sukirno. 2006. Ekonomi Pembangunan: Proses, Masalah dan dasar Kebijaksanaan. Jakarta: Lembaga Penerbit Fakultas Ekonomi Universitas Indonesia.
[17] Tamulevičienė, D., Androniceanu, A. 2020. Selection of the indicators to measure an enterprise’s value and its changes in the controlling system for medium-sized enterprises. Entrepreneurship and Sustainability Issues, 7(3), 1440-1458. https://doi.org/10.9770/jesi.2020.7.3(1)
[18] Todaro, Michael. P., 2003. Pembangunan Ekonomi Di Dunia Ketiga (Jilid Satu), Jakarta: Penerbit Erlangga.
[19] Tulus T.H. Tambunan, 2003, Perekonomian Indonesia, Beberapa Masalah Penting, Jakarta, Penerbit Ghalia Indonesia
[20] Tvaronavičienė, M., Baublys, J., Raudeliūnienė, J., Jatautaitė, D. Chapter 1: Global energy consumption peculiarities and energy sources: Role of renewables, Editor(s): Manuela Tvaronavičienė, Beata Ślusarczyk, Energy Transformation Towards Sustainability, Elsevier, 2020, Pages 1-49, ISBN 9780128176887, https://doi.org/10.1016/B978-0-12-817688-7.00001-X
[21] Valli, Vittorio, and Saccone, Donatella, 2009, “Structural Change and Economic Development in China and India," Working Paper Series No.7/2009, Torino: Department of Economics, University of Turin.
[22] Zagler, Martin, 2000, “Economic Growth, Structural Change, And Search Unemployment”, Journal Of Economics, Volume 96, Number 1, 63-78, DOI: 10.1007/S00712-008-0025-Z
Downloads
Published
Issue
Section
License
Copyright (c) 2020 AUTHOR
This work is licensed under a Creative Commons Attribution 4.0 International License.
You are free to:
- Share — copy and redistribute the material in any medium or format for any purpose, even commercially.
- Adapt — remix, transform, and build upon the material for any purpose, even commercially.
- The licensor cannot revoke these freedoms as long as you follow the license terms.
Under the following terms:
- Attribution — You must give appropriate credit , provide a link to the license, and indicate if changes were made . You may do so in any reasonable manner, but not in any way that suggests the licensor endorses you or your use.
- No additional restrictions — You may not apply legal terms or technological measures that legally restrict others from doing anything the license permits.
Notices:
You do not have to comply with the license for elements of the material in the public domain or where your use is permitted by an applicable exception or limitation .
No warranties are given. The license may not give you all of the permissions necessary for your intended use. For example, other rights such as publicity, privacy, or moral rights may limit how you use the material.
