Determinant Factors of Unemployment Level in Indonesia at 2000-2016 Period

Abstract

This study aim is to prove determinant factors affecting unemployment level in Indonesia. The data is collected from annual report from 2000 to 2016 period. The verification uses econometric analysis of Autovector Regression (VAR). The research results show that unemployment level in Indonesia are affected by inflation in first years of previous period, foreign capital flow in lag period of first and second year, GDP in second year, number of people on both first and second year, and wages for the first and second year. The Grangger causality test shows that unemployment level to wage levels (WGE) is dynamic (reciprocal), while the GDP in UE, UE with POP, UE GDP, are unidirectional. Grangger test for INF with UE is not proved significant.