Elastisitas Permintaan Tenaga Kerja dan Kekakuan Upah Riil Sektoral di Sulawesi Selatan

Abstract

This study aimed to measure the elasticity of labor demand and the level of realwage rigidity as well as studying the dynamic behavior of real wages in South Sulawesi.The elasticity of labor demand were analyzed using an OLS method, the level of wagerigidity was analyzed using an error correction model (ECM), and dynamic behavior ofreal wages was analyzed using an impulse response function (IRF). The results showedthat the elasticity of labor demand was inelastic to the real wages in all sectors.Theelasticity of labor demand of the changes in a variety of sources of economic growth wasalso inelastic in all sectors. The employment opportunities in agricultural and industrialsectors were more responding to the increasing exports and investment, while othersectors more responding to the increased private consumption. Labor productivity andimports significantly reduced employment opportunities in all sectors. The industrialsector had a more real wages rigidity compared to the real wages in agricultural sectorand other. Real wages rigidity of industrial sector took about 4.6 years to reachequilibrium conditions, while the agricultural sector only took about 1.5 years and othersectors needed about 2.2 years. The increased competitiveness of various exportedcommodities and the creation of a conducive-investment climatewere a strategic step toexpand employment opportunities. In addition, the policy such as setting the regionalminimum wage (UMR) more suitable to market wages was also considered as a strategyto reduce wage rigidity in South Sulawesi.