Analisis Determinan Kesempatan Kerja Sektor Formal di Indonesia: Pendekatan Regresi Data Panel Tahun 2020-2024

Abstract

The formalization of employment remains a persistent structural challenge in Indonesia, where only 42,05% of the 144,64 million employed population was absorbed by the formal sector as of August 2024. This condition was futher exacerbated by the Covid-19 pandemic, which displaced millions of workers into informal employment, alongside pronounced inter-provincial disparities in formal labor market participation. This study aims to empirically investigate the determinants of formal sector employment opporturnities across Indonesian provinces, with a specific focus on Gross Regional Domestic Product (GRDP), educational attainment proxied by Mean Years of Schooling (MYS), and digitalization proxied by information an communication technology penetration. The theoretical framework draws upon the labor demand theory, Becker’s (1964) and Mincer’s (1974) human capital theory, and the digital economy literature. Secondary data were obtained from the Central Bureau of Statistics (BPS), the Ministry of Communication and Information Technology. And the Ministry of Education, covering 34 province over the 2020-2024 period, yielding 170 panel observations. Model selection was conducted through the Chow Test and Hausman Test, both of which consistently identified the Fixed Effect Model (FEM) as the most appropriate estimator across both model specifications. Empirical findings indicate that GDRP exerts no statistically significant effect on formal sector employment, a result attributable to the jobless recovery phenomenon observed in the post-pandemic economic rebound. In contrast, educational attainment demonstrates a positive and highly significant effect, with a coefficient of approximately 6,50, implying that a one-year increase in mean years of scooling expands the formal employment share by 6,50 percentage points, ceteris paribus. Digitalization likewise exhibits a positive and statistically significant influence, with coefficients ranging from 0,044 to 0,053 across model specifications, suggesting that ICT penetration facilitates investment in human capital development and equitable digital transformation constitute the most critical policy instruments for accelerating the structural shift toward broader and more inclusive formal employment in Indonesia.