The Effect of Remittance, GDP, investment, and population on Unemployment in Indonesia

Abstract

One of the problems exist in almost all countries is unemployment that has not been resolved perfectly. It occurs because employment cannot absorb all the job seekers who have diverse expertise, as well as domestic investment that is still unable to create new jobs. Indonesia which has an increase of population above the economic growth has not been able to alleviate unemployment so that it needs to encourage and enlarge export services. Researchers take unemployment, economic growth, and remittance as the topic of discussion, where data reveals that number of unemployed people increases very rapidly and remittances tend to be stable. The method used in this study is Ordinary Least Square (OLS) with the study location in Indonesia and using annual data (time series) from 1984 to 2016. The research results show that remittances, population growth, and economic growth have a significant positive effect on unemployment, while investment has a significant negative effect on unemployment. In the end, the problem of unemployment cannot be resolved partially but need to jointly encourage all possible variables for the solution.