Employment Absorption: Elasticity in the Industry and Services Sector in Indonesia

Abstract

Increased economic development in the industrial and service sectors is a component that is expected to be able to contribute significantly to the Indonesian economy. The research objective is to compare the number of absorbed workforces and employment elasticity in the industrial and service sectors in Indonesia. Variables used in this study consist of the variable influence of labor and GDP on production units, in this case, the industrial sector and the service sector which can later compare elasticities employment opportunities in the industrial and service sectors. In this study, the type of data used is secondary data from 2010-2019. The analytical tool used is a two-step structural model and analyzed using SPSS. From the results of the analysis, it was found that the elasticity of employment in the industrial sector is positive inelastic. The elasticity of employment in the service sector is positive inelastic. The elasticity of employment in the service sector is greater than the elasticity of employment in the industrial sector in Indonesia.