The Effect Of Business Units, Gross Regional Domestic Product, Inflation, And Minimum Wage On Labor Absorption In Micro And Small Industries In Central Java During The Covid-19 Pandemic

Hanna Zakiy Raihan, Agus Arifin, Lilis Siti Badriah, Bagus Ardiannova

Abstract


Economic development is often associated with industrialization. The COVID-19 pandemic has had a significant impact on the industrial sector, especially micro and small industries. Micro and small industry is an important industry because of its role in absorbing labor in an effort to overcome unemployment in Indonesia. This research aims to determine the influence of the number of business units, GRDP, Inflation, Regency/City Minimum Wage (UMK), and the COVID-19 Pandemic as dummy variables on Micro and Small Industries in Central Java Province. The type of research carried out in this research is quantitative research using secondary data. Data was obtained from the Central Statistics Agency (BPS) from 2018 – 2022 in 35 districts/cities in Central Java Province. The research method used is panel data regression analysis. The panel data processing technique in this research uses Eviews 12 software. The results show that the variables number of business units have a positive and significant influence on labor absorption. Inflation have a significant but negative effect on labor absorption. Meanwhile GRDP, minimum wage, and COVID-19 variables do not affect labor absorption.

Keywords: Labor Absorption, Micro and Small Industries, Business Units, Inflation, GRDP, Minimum Wage, Covid-19, Central Java.


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References


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