Government expenditure and private investment on the value of agricultural sector in labor absorption

Abstract

This paper aims to find out to what extent the government expenditure and private investment on the value of agricultural sector in labor absorption from 1990 to 2005 in South Sulawesi Province, Indonesia and the most dominant variable and the one which had strong correlation to labor absorption in agricultural sector in South Sulawesi Province. The study was carried out in South Sulawesi Province. The data consisted of time series secondary data on 1990-2005. The data in this study were obtained through observation, interview, and documentation. The data were analyzed using multiple linier regressions in two series. The result shows that the government expenditure have a positive and significant influence on the value of agricultural sector output, while the private investment and dummy variable economic crisis do not have significant influence on the value of agricultural sector output, and the value of agricultural sector output has a positive and significant influence on labor absorption. The result shows that the government expenditure and private investment have a positive influence on labor absorption, and the value of agricultural sector output at condition of after economic crisis higher than at after economic crisis. The most dominant variable and has strong relation affecting the labor absorption is government expenditure.