High unemployment, disrupted economic growth and sustainable development goals: Analyzing unemployment reduction

Abstract

This study aims to analyze the factors influencing unemployment and determine the role of stakeholders in reducing unemployment in Central Java Province, Indonesia. Data encompasses 35 regencies and municipalities of the Central Province from 2007 to 2020, with the total sample being 490. The employed sequential mixed method includes two analytical tools, namely panel data and vector regression with mactor software; the latter is used to examine the convergence among actors. Six main actors in reducing unemployment are identified, namely Regional Development Planning Agency (Badan Perencanaan Pembangunan Daerah/Bappeda), Department of Labor, Department of Education, community leaders; job training center, and Indonesian Chamber of Commerce (Kamar Dagang dan Industri Indonesia/Kadin). The results of the first analysis show that the variables of economic growth, Human Development Index (HDI) and school enrollment have negative and significant effect on unemployment. The results of convergence analysis highlight the importance of the Department of Labor in linking the supply and demand sides of labor in Central Java.