The Impact of Agricultural Sector Development on Employment and Income Inequality using Panel Data Regression Analysis
Abstract
The level of labor absorption and distribution of community income does not follow the large value of GRDP and investment. This study aims to analyze the effect of development and investment in the agricultural sector on labor absorption and the distribution of income. This study used a quantitative descriptive with secondary data and multiple linear regression analysis. The analysis is divided into two models, the first model is to analyze the impact of development and investment on labor absorption, while the second model is on the distribution of income. The first model shows that agricultural development has a significant effect on labor absorption, while agricultural investment has no significant effect. The second model shows that agricultural development has a significant effect on income distribution while agricultural investment has no significant effect. The implication is that the government implements policies that encourage productivity, as well as equal distribution of supporting facilities.
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Sani, Rizqia Mutiara., Sambodo, H., & Bambang, B. (2018). The Effect of Human Capital, Labor, and Capital on Economics Growth in Barlingmascakeb. Eko-Regional, 13(2), 60–68.
Saifuloh, Nur Imam., Ahmad Abdul Aziz, & Suharno. (2019). The Effect of Employment Aspect on Poverty in Central Java Indonesia. Eko-Regional, 14(1), 1–9.
Simanjuntak, M., Yulmardi, & Bhakti, A. (2018). The influence of GRDP in the agricultural sector, farmer exchange rates and investment in the agricultural sector on employment in the agricultural sector in Jambi Province. Resource and Environmental Economics, 7(1), 1–12.
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Wahyuni, S. (2019). Factors Affecting Employment Opportunities in the Agricultural Sector in South Sulawesi. Economics, 207–2015.
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Yasrizal, & Hasan, I. (2016). The Effect of Agricultural Sector Development on Income Distribution And Employment Opportunities In Indonesia. JIEP, 16(1), 54–64
Akpolat, A. (2014). The Long-Term Impact of Human Capital Investment on GDP A Panel Cointegrated Regression Analysis. Economics Research International, 2014(5), 1–10.
Ali, M., Man, N., Abd Latih, I., Melissa Muharam, F., & Zobidah Omar, S. (2018). The Use of Information and Communication Technologies in Agricultural Risk Management by The Agricultural Extension Service in Malaysia. International Journal of Agricultural, Enviroment and Food Sciences, 2(1), 29–35.
Andraz M, J. (2013). One of Economic Effects of Public Investment. College of William and Marry Departement of Economics, 1(8), 1-31.
Badriah, lilis S. (2019). Inequality in Income Distribution in Relation to Economic Growth and Poverty and the Factors Affecting Them. Sustainable Competitive Advantage (SCA), 9(1), 232–248.
Beck, T., Dottling, R., Lambert, T., & Van Dijk, M. (2022). Liquidity Creation, Investment, and Growth. Journal of Economic Growth, 28(1), 297–336.
Belmondo, B., & Triani, M. (2020). The Influence of Investment and Wages Economic Performance on Absorption of Labor in the Agricultural Sector in Indonesia. Journal of Economic and Development Studies, 2(4), 61–68.
Boediono. (2015). Ekonomi Makro. Yogyakarta: BPFE-Yogyakarta.
Cervellati, M., Meyerheim, G., & Sunde, U. (2023). The Empirics of Economic Growth Over Time and Across Nations: a unified growth perspective. Journal of Economic Growth, 28(4), 173–224.
Chapman A, K. (2015). Economic Development and Female Labor Force Participation in the Middle East and North Africa: A Test of the U-Shape Hypothesis. The Gettysburg Economic Review, 8(3), 5-22.
Coderoni, S., Cardillo, C., Macri, M. C., & Perito, M. A. (2018). Farm Employing Foreign Workers in Italy. German Journal of Agricultural Economic, 67(3).
Cortignani, R., Carulli, G., & Dono, G. (2020). COVID-19 and Labour in Agriculture: Economic and Productive Impacts in an Agricultural Area of the Mediterranean. Italian Journal of Agronomy, 15(1653), 172–180.
Dewi, R. F., Prihanto, P. H., & Edy, J. K. (2016). Analysis of Labor Absorption in the Agricultural Sector in West Tanjung Jabung Regency. E-Journal of Resource and Environmental Economics, 5(1), 19–25.
Dumasari. (2020). Agricultural Development: Prioritizing the Left Behind. Pustaka Pelajar.
Eren Arbatl, & Gokmen, G. (2023). Human Capital Transfers and Sub-National Development: Armenian and Greek Legacy in Post-Expulsion Turkey. Journal of Economic Growth, 28(1), 1–43.
Faqih, A. (2021). The effect of development in the agricultural sector to employee and income distribution. Jurnal Ilmu Pertanian, 1(2), 20–25.
Gong, B. (2018). Agricultural reforms and production in China: Changes in provincial production function and productivity in 1978–2015. Journal of Development Economics, 132(C), 18–31.
Handayani Mastuti, Y. (2012). Analysis of leading sub-sectors in Pemalang. Eko-Regional, 7(2), 69–78.
Haryatiningsih, R., & Hafiz, E. A. (2021). The Effects of GRDP, UMK, HDI on West Java District/City Labor Absorption 2010-2020. Research Journal of Economics, 1(1), 55–65.
Ikhsan, A., Ariusni, & Putri, D. Z. (2019). Analysis Of the Influence of The Agricultural Sector, Mining Sector, And Industrial Sector on Income Distribution Inequality in Indonesia. Journal of Economic and Development Studies, 1(3), 731–738.
Iqbal, N., Ahmad, N., Haider, Z., & Anwar, S. (2014). Impact of Foreign Direct Investment (FDI) on GDP: A Case Study from Pakistan. International Letters of Social and Human Sciences, 16, 73–80.
Istanti, E., Kusumo Negoro, B., & Daengs, A. (2021). Analysis Of Factors Affecting Income Distribution Nequality in Indonesia. International Journal of Entrepreneurship and Bussines Development, 4(2), 157–163.
Koval, V., Polyezhayev, Y., & Bezkhlibna, A. (2018). Communicative Competences in Enhancing of Regional Competitiveness in The Labour Market. Baltic Journal of Economic Studies, 4(5), 105–113.
Lahoti, R., & Swaminathan, H. (2016). Economic Development and Woman’s Labor Force Participation in India. Feminist Economics, 2(22), 168–195.
McArthur, W. J., & McCord, C. G. (2017). Fertilizing growth: Agricultural inputs and their effects in economic development. Journal of Development Economic, 127(C), 133–152.
McCullough, E. (2016). Labor productivity and employment gaps in Sub-Saharan Africa. Elsevier, 67(C), 133–152.
Nooralam, A. Y., & Laut, L. T. (2020). The Role of The Agriculture Sector in the Absorption of Labor in Indonesia 2010-2018. Dinamic: Directory Journal of Economic, 2(3), 798–808.
Ozkan, F., Ozkan, O., & Gunduz, M. (2012). Causal Relationship Between Construction Investment Policy and Economic Growth in Turkey. Technological Forecasting and Social Change, 79(2), 362–370.
Pereira, Alfredo Marvao and Andraz, Jorge M. (2013). On the Economic Effects of Public Infrstructure Investment: Survey of The International Evidendce. Journal of Economic Development, Chung Ang University Departement of Economics, 38(4), 1-37.
Quang Trinh, T., Ranola Jr, F. R., Camacho, D. L., & Simelton, E. (2018). Determinants of farmers’ adaptation to climate change in agricultural production in the central region of Vietnam. Land Use Policy, 70(C), 224–231.
Rahaman, A., & Chakraborty, S. (2015). Effect of Foreign Direct Investment on GDP: Empirical Evidence from Developing Country. Advances Economics and Bussines, 3(12), 587–592.
Sani, Rizqia Mutiara., Sambodo, H., & Bambang, B. (2018). The Effect of Human Capital, Labor, and Capital on Economics Growth in Barlingmascakeb. Eko-Regional, 13(2), 60–68.
Saifuloh, Nur Imam., Ahmad Abdul Aziz, & Suharno. (2019). The Effect of Employment Aspect on Poverty in Central Java Indonesia. Eko-Regional, 14(1), 1–9.
Simanjuntak, M., Yulmardi, & Bhakti, A. (2018). The influence of GRDP in the agricultural sector, farmer exchange rates and investment in the agricultural sector on employment in the agricultural sector in Jambi Province. Resource and Environmental Economics, 7(1), 1–12.
Tarigan, Robinson. (2014). Ekonomi Regional Teori dan Aplikasi. Edisi Revisi. Cetakan Ketujuh, Maret 2014. PT. Bumi Aksara, Jakarta.
Wahyuni, S. (2019). Factors Affecting Employment Opportunities in the Agricultural Sector in South Sulawesi. Economics, 207–2015.
Wijaksana, Gumilar., Muhamad Safri & Parmadi. Kontribusi dan Elastisitas Subsektor dalam Sektor Pertanian di Kabupaten Tebo. Jurnal Paradigma Ekonomika, 12(2), 77-86.
Yasrizal, & Hasan, I. (2016). The Effect of Agricultural Sector Development on Income Distribution And Employment Opportunities In Indonesia. JIEP, 16(1), 54–64
Published
2024-09-02
How to Cite
SETIAWAN, Alvin; BAROKATUMINALLOH, Barokatuminalloh; FAUZI, Pahrul.
The Impact of Agricultural Sector Development on Employment and Income Inequality using Panel Data Regression Analysis.
Eko-Regional: Jurnal Pembangunan Ekonomi Wilayah, [S.l.], v. 19, n. 2, p. 142 - 151, sep. 2024.
ISSN 2620-8849.
Available at: <https://jos.unsoed.ac.id/index.php/er/article/view/15037>. Date accessed: 07 apr. 2025.
Section
Articles
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