The Effect of SEZ Investment and Development on Labor Absorption

Abstract

The objectives of this study are to test and prove 1) the effect of investment in Special Economic Zones (SEZ) on labor absorption, 2) the effect of the development of Special Economic Zones on labor absorption empirically, and 3) the effect of investment and development of Special Economic Zones on labor absorption. The problem in this research is that the world investment in Indonesia still reaches 1.97%. The average foreign investment to Indonesia in 2012-2016 was US $ 1,417.58 billion per year. In addition, the achievement of the investment ratio target has also only reached 32.7% or was below the National Medium Term Development Plan (RPJMN) target of 38.9% in 2019. This research method used a survey with secondary data (web, documents, and data from the Central Bureau of Statistics). The sampling technique employed non-probability sampling with saturated sampling. Saturated sampling is a sampling technique when all members of the population are used as samples. In this study, the sampling used 15 areas with 43 business units. The analysis results showed that 1) investment did not have a significant effect on labor absorption; 2) development did not have a significant effect on labor absorption; 3) investment and development simultaneously or together did not have a significant effect on labor absorption variables.