The Impact of Investment, GRDP, and Wage to Labor Absorption in the Manufacturing Sector in West Sumatera

Safrina, Reni (2024) The Impact of Investment, GRDP, and Wage to Labor Absorption in the Manufacturing Sector in West Sumatera. S1 thesis, Universitas Andalas.

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Abstract

ABSTRACT This research aims to analyze the influence of investment, GRDP and wage on labor absorption in the manufacturing sector in West Sumatra in the 2014-2023 period. By using Generalized Method of Moments (GMM) regression method with the Arellano-Bover/Blundell-Bond (System GMM) estimator two step on regency/municipality level panel data, the research results show that investment in the manufacturing sector and wage has a significantly positive effect on labor absorption, while GRDP has an insignificant positive effect. These results indicate the important role of the local governments to strengthen Human Resources (HR) development by technical skills training and vocational education programs that will help improve the skills of the workforce so they remain relevant in an increasingly automated industry. Keywords: Labor Absorption, Investment, GRDP, Wage, GMM estimator

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