Incremental Labor Output Ratio (ILOR) and Output Growth in Indonesia

Abstract

This research specifically projecting output and predicting economic growth, investment needs, and additional labor by sector using labor and output data (GDP according to business fields at constant prices) during the 2001-2019 period. The analytical method used is a projection of labor based on the output approach, namely the Incremental Labor Output Ratio (ILOR). The results show that (1) an increase in output in the agricultural sector does not have an impact on expanding the absorption of labor in that sector, but the conditions are in contrast to an increase in output in the social services, mining and trade sectors which will have an impact on expanding the workforce (2) Additional employment in the agricultural sector does not provide optimal results or additional labor in the agricultural sector and results in a decrease in output in the future (3) Additional labor in the mining sector will produce high output in the future.