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Novi T. Kiak, Marselina Ratu, Maria I. H. Tiwu, Olivia Louise Eunike
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Eduvest Journal of Universal Studies
Volume 2 Number 1, January, 2022
p- ISSN 2775-3735- e-ISSN 2775-
3727
ANALYSIS OF LABOR ABSORPTION IN EAST NUSA
TENGGARA PROVINCE 2016-2020 PERIOD
Novi T. Kiak, Marselina Ratu, Maria I. H. Tiwu, Olivia Louise Eunike
Tomasowa
Nusa Cendana, University, Indonesia
ARTICLE INFO ABSTRACT
Received:
December, 26
th
2021
Revised:
January, 17
th
2022
Approved:
January, 18
th
2022
This study analyzes the absorption of labor in East Nusa
Tenggara Province for the 2016-2020 period. The research aims
to identify sectors that have the power to absorb labor and the
ability to compete in the 2016-2020 period; and find out how the
effect of economic growth on employment in East Nusa
Tenggara Province for the 2016-2020 period. The type of
secondary data was obtained during the 2016-2020 observation
period. These data include GRDP based on constant prices in East
Nusa Tenggara Province for the 2016-2020 period and
population data for those aged 15 years and over (labor data).
The analytical tools used are Location Quotient (LQ), Shift Share
(SS), Kindergarten Productivity, TK Elasticity, MRP, Klassen and
Typology. The results of the LQ analysis show that the
agricultural, forestry and fisheries sectors are sectors that are not
the leading sectors in absorbing labor during that period, the
study because it has an LQ value below 1. The results of the
analysis that the shift-share analysis shows during the analysis
period 2016 to by 2020. In the province of East Nusa Tenggara,
the largest information and communication sector has the
largest competitive advantage, which is indicated by having a
higher nij value compared to other provinces sector and has the
largest number of employees.
KEYWORDS
Kindergarten Absorption, Location Quotient, Shift Share,
Kindergarten Productivity, Kindergarten Elasticity
This work is licensed under a Creative Commons
Attribution-ShareAlike 4.0 International
Novi T. Kiak, Marselina Ratu, Maria I. H. Tiwu, Olivia Louise Eunike Tomasowa
Analysis of Labor Absorption In East Nusa Tenggara Province 2016-2020 Period 174
INTRODUCTION
One of the economic problems that always arises in the region is the problem of
the availability of jobs that can absorb labor. This problem usually arises when the rate of
population growth is greater than the rate of economic growth. The large number and
growth of the labor force accompanied by this limited capacity will lead to
unemployment. Ideally, high economic growth is followed by high employment
absorption. One form of population participation is through employment opportunities
which are opportunities for residents to carry out their functions as economic resources in
the production process. The large number and growth of the labor force accompanied by
this limited capacity will lead to unemployment.
Regional economic development efforts have a goal in addition to economic
growth as well as efforts to reduce the number of unemployed, because otherwise the
number of unemployed will continue to increase and disrupt the process of further
regional development. Development in the field of manpower is an integral part of
national development, so that labor problems that arise are also the impact of problems of
national economic development. Discussions on employment cannot be separated from
the population and the workforce. The number of working age population (15 years and
over) in an area continues to grow along with the increase in population. The total
population in East Nusa Tenggara Province in 2016 was 5,203,514 people and in 2020 it
was 5,541,394 people, thus during that period there was an increase in the number of
residents of 337,880 people. The working age population in East Nusa Tenggara Province
in 2016 was 2,277,068 people and in 2020 it was 2,458,232 people, so there was an
increase in the population of 181,164 people or 1.49%. Large population growth which is
usually followed by a growth in the labor force (Toossi, 2012). There will be serious
problems with the absorption of labor if the increase in the labor force is not matched by
the increase in labor absorption (Brückner & Pappa, 2012).
(Tomasowa & Pudjihardjo, 2011) suggests about the theory of economic basis
that regional economic growth is highly dependent on external demand from outside the
region. According to (Fiń, 2017), the growth of some basic sectors will determine overall
regional development, while the non-base sectors are only the consequences of regional
development. Goods and services from the exported base sector will generate income for
the region and increase consumption and investment (Banerjee, Cicowiez, & Gachot,
2015). An increase in income will not only lead to an increase in demand for the basic
sector, but will also increase demand for the non-base sector, which in turn will also
encourage an increase in investment in the non-basic sector.
According to the Harrod-Domar theory in (Boianovsky, 2018), in order for an
economy to continue to experience full use of its capital tools and achieve full
employment opportunities from time to time (steady growth), a rate of increase in capital
equipment and labor must be created equal to the desired growth rate (warranted). rate of
growth). Therefore, in relation to regional economic development, the opening of the
economy of a region is very important because it will facilitate the movement of capital
and labor equipment from one region to another so that full use of capital tools and
employment opportunities can occur from time to time.
Neo-classical theory suggests that the factors that will determine the growth rate
of a country's economic growth are the increase in capital accumulation which includes
investment in land, physical infrastructure and human capital, population and labor force
growth, as well as technological progress technological progress) which is the most
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important source of economic growth (Eisner & Nadiri, 1968). Technological progress
can be in the form of saving workers or saving capital (Todaro & Smith, 2000).
Therefore, this study seeks to systematically describe the absorption of labor in the
province of East Nusa Tenggara so that it can be taken into consideration for local
governments, especially in the preparation of economic and manpower planning and
policies.
RESEARCH METHOD
To answer the research objectives proposed, namely to obtain an overview and
understanding of regional economic conditions in employment, the following analytical
methods can be used:
1. Analysis of Labor Elasticity is used to determine how much influence
economic growth has on employment in TTS Regency – East Nusa Tenggara
Province.
2. Analysis (1). Location Quotient (LQ), (2). MRP (overlay), (3). Klassen
typology is used to determine the basic and non-basic sectors in employment.
3. Analysis of Labor Productivity. This analysis is used to calculate the output
produced by labor by sector.
To assist the analysis of changes in the structure of the workforce, several
additional indicators such as productivity and labor elasticity are needed. Labor
productivity is calculated by the formula (see (Hasnah, 2016)):
............................................................. (1)
Another indicator to help analyze changes in the structure of the workforce is the
elasticity of the workforce. Labor elasticity is a value that shows a percentage indicating a
change in the number of workers that can be absorbed in sector i. The elasticity of
employment opportunities is formulated as follows:
................................................... (2)
Where :
Pi: Labor productivity in sector i
EKKi: elasticity of employment in sector i
KK: the average growth rate of labor absorption in sector i in TTS Regency in 2005-
2010,
GDP: the average economic growth rate in TTS Regency in 2005-2010.
EKKi is the elasticity of employment opportunity in sector i of TTS Regency. If the
elasticity value:
EKK 1 indicates the growth rate of labor absorption is greater than the rate of labor
productivity.
EKK 1 shows that the growth of labor absorption is smaller than the rate of labor
productivity.
EKK = 1 indicates a constant level of productivity
The LQ technique aims to measure the comparative advantage of an area in
determining its base sector. In this analysis, LQ is calculated based on the number of
workers by comparing the workforce in an area (district/city) with workers in the
comparison area (province). The formula used is (Arsyad, 1999):
......................................... (3)
Novi T. Kiak, Marselina Ratu, Maria I. H. Tiwu, Olivia Louise Eunike Tomasowa
Analysis of Labor Absorption In East Nusa Tenggara Province 2016-2020 Period 176
Where:
Eij is a sector i worker in district/city j
Ej is the total workforce in the district/city j
Ein is a provincial sector worker.
En is the total workforce of the province.
The Growth Ratio Model (MRP) is used to obtain the reference area growth ratio
(RPr) and study area growth ratio (RPs) with the formula:
................................................... (4)
and
........................................................(5)
Where :
EiR is the change in the workforce of sector i in the reference area,
EiR(t) is the workforce of sector i in the reference area of year t,
ER is the total workforce change in the reference area,
ER(t) is the total workforce in the reference area year (t),
Eij is the change in the workforce of sector i in the study area,
Eij(t) is the workforce of sector i in the study area in year t.
Overlay analysis is intended to see a description of potential economic activities
based on growth criteria (MRP) and contribution criteria (Location Quotient) which are
further classified into 4 (four) possibilities in the Overlay analysis related to the
description of the economic structure. The four possibilities are (MT, 1999).
1. Growth (+) and contribution (+), shows a very dominant sector, both growth and
contribution;
2. Growth (+) and contribution (-), indicating a sector with dominant growth but a small
contribution;
3. Growth (-) and contribution (+), indicating a sector with small growth but large
contribution;
4. Growth (-) and contribution (-), indicate a sector that has no potential, both in terms
of growth criteria and contribution.
In this case, Klassen's Typology analysis uses labor data. This aims to see the
position of the economic sectors that have the potential to absorb labor in Kupang City.
In Klassen's Typology analysis, the observed sector is also divided into four
classifications, namely the fast-growing and fast-growing sector (high growth and low
income), the advanced but depressed sector (high income but low growth), the fast-
growing sector (high growth but low income). ), and relatively lagging sectors (low
growth and low income).
RESULT AND DISCUSSION
The results of the analysis of the Location Quotient of Labor since 2016 -
2020 are in full in Table 1.
Table 1 LQ Results by Field of Business In East Nusa Tenggara Province, 2016 -
2020
Category
Description
2016
2017
2018
2019
2020
AVERAGE
A
Agriculture, Forestry and
Fisheries
0,60
0,54
0,53
0,56
0,52
0,55
B
Mining and excavation
0,97
1,04
0,95
1,06
1,03
1,01
C
Processing industry
1,78
1,59
1,64
1,47
12,92
3,88
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D
Electricity and Gas
Supply
0,73
1,22
1,42
1,77
1,37
1,30
E
Water Supply, Waste
Management, Waste and
Recycling
1,48
1,59
1,51
1,19
1,18
1,39
F
Construction
2,21
2,28
2,37
2,08
1,94
2,17
G
Wholesale and retail
trade, Repair of Cars and
Motorcycles
0,85
1,08
1,17
1,04
1,01
1,03
H
Transportation and
Warehousing
3,26
2,04
2,28
2,34
18,59
5,70
I
Provision of
Accommodation and
Drinks
1,00
1,16
1,07
0,99
0,89
1,02
TOTAL
1,00
1,00
1,00
1,00
1,00
1,00
Source: Data Processed, 2021
From the LQ value in Table 1, it can be seen that the agricultural sector;
forestry, and fisheries are not among the sectors that excel in absorbing labor in East
Nusa Tenggara Province with an LQ value < 1 for the 2016 - 2020 research period. the
transportation and warehousing sector, and for other sectors it is also a superior sector for
employment.
The use of the Growth Ratio Model (MPR) is divided into 2 (two), namely the
reference area growth ratio (RPr) and the study area growth ratio (RPs). Based on the
results of the MRP analysis, it shows that the growth rate of labor and the contribution of
labor generated by the sector in East Nusa Tenggara Province has a small growth rate, the
growth rate of the same sector at the national level, indicates that most of the sectors in
East Nusa Tenggara Province have low growth rates. small growth but big contribution;
Based on the analysis of the Klassen Typology of East Nusa Tenggara Province
with a sectoral workforce approach, it can be seen that the Manufacturing Industry sector;
the electricity and gas procurement sector; wholesale and retail trade, car and motorcycle
repair sector; The transportation and warehousing sector is classified as a developed
sector and is growing rapidly. For the Mining and Quarrying sector, the Water Supply
sector, Waste Management, Waste and Recycling, the construction sector, the
Accommodation and Food and Drink Provision sector And the Agriculture, Forestry and
Fisheries sectors are relatively lagging sectors. The data is then grouped according to the
Klassen Typology classification as presented in the following table:
Table 2 Klassen Typology Based on Sectoral Kindergarten Approach in East Nusa
Tenggara Province
Sector Contribution
Growth rate (R)
Li > L
Li < L
Ri > R
Sector developed and growing
rapidly
( C, D, G, H )
Sector developed but
depressed
( - )
Ri < R
Potential sector/can develop
rapidly
( B, E, F, I)
Relatively lagging sector
( A )
Source: Processed data
Information : A: Agriculture, Forestry and Fisheries; B: Mining and Quarrying; C: Processing
Industry; D: Electricity and Gas Procurement; E: Water Supply, Waste Management, Waste and
Novi T. Kiak, Marselina Ratu, Maria I. H. Tiwu, Olivia Louise Eunike Tomasowa
Analysis of Labor Absorption In East Nusa Tenggara Province 2016-2020 Period 178
Recycling; F: Construction; G: Wholesale and retail trade, Repair of Cars and Motorcycles; H:
Transportation and Warehousing; I: Provision of Accommodation and Food and Drink
In this case, labor is one of the factors of production that plays an important role
in the formation of added value of an economic activity. so to see a picture of how much
added value is provided by each worker in an economic activity, it can be seen by
calculating labor productivity. The results of the calculation of labor productivity in East
Nusa Tenggara Province from 2016 to 2020 are explained below.
Table 3 Labor Productivity Calculation Results East Nusa Tenggara Province,
2016-2020
DESCRIPTIO
N
BUSINESS FIELD
2016
2017
2018
2019
2020
Average
1
Agriculture, Forestry, Plantation ,
Fishery/Agriculture, Forestry,
Estate,Fishery
31,11
28,25
27,05
29,65
27,26
28,67
2
Mining And Quarrying
50,48
54,18
48,60
56,12
53,63
52,60
3
Manufacturing Industry
92,79
82,84
84,43
77,49
675,30
202,57
4
Electricity, Gas and
Water/Electricity, Gas and Water
38,19
63,81
72,96
93,60
71,72
68,06
5
Building/Construction
77,12
83,06
77,75
62,84
61,46
72,45
6
Wholesale And Retail Trade,
Restaurant/Wholesale And Retail
Trade, Restaurant
115,05
118,7
1
121,7
9
109,9
4
101,13
113,32
7
Transportation, Warehousing,
Communication / Transportation,
Communication, Warehousing
44,22
56,33
60,30
54,97
52,95
53,76
8
Finance, Insurance, Rental and
Building Business, Land, and
Corporate Services / Financing,
Insurance, Real Estate and Business
Services
169,74
106,6
1
117,4
0
123,3
6
971,58
297,74
9
Community, Social, and Personal
Services
52,05
60,49
55,00
52,47
46,73
53,35
Total
670,7
654,3
665,3
660,4
2.061,
8
942,5
Source: Data Processed
The table above shows that the highest average productivity during the study
period was achieved by the Finance, Insurance, Leasing and Building, Land, and
Corporate Services business fields. The lowest productivity is in the sector/business field
of Agriculture, Forestry, Plantation, Fisheries. The average productivity for all sectors is
942.5. This means that each worker on average produces an output or contribution to
GRDP of Rp. 942.5 million. The sectors/ business fields of Finance, Insurance, Rental
and Building Business, Land, and Corporate Services in East Nusa Tenggara Province
showed the highest productivity with 297.74.
Economic growth has an influence on the workforce in the area concerned,
namely in the form of growth in labor productivity and labor absorption (Cai & Wang,
2010). The effect of economic growth on employment is carried out by analyzing the
elasticity of labor. From table above it can be seen that in East Nusa Tenggara Province
the highest average elasticity during the study period was achieved by the Finance,
Insurance, Rental and Building Businesses, Land, and Corporate Services
sectors/business fields, while the electricity, gas and electricity sector/business fields
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company water shows the lowest elasticity. The elastic (sensitive) sectors in the
absorption of labor are the mining and quarrying sector; processing industry sector;
building sector; the trading, wholesale and retail sector of Restaurants; and the financial,
insurance, rental and building business, land and corporate services sectors. The sector
that has the highest elasticity is the Finance, Insurance, Rental and Building Business,
Land, and Corporate Services sector at 4.8, this means that if the economy in this sector
grows by 1 (one)% per year it can cause an increase in employment in the sector. The
average is 4.8% per year.
Table 5 Calculation of Labor Elasticity Against GRDP in TTS Regency, 2005-
2010
Source: Data Processed (2021)
According to the Harrod-Domar theory, in order for an economy to continue to
experience full use of its capital tools and achieve full employment opportunities from
time to time (steady growth), a rate of increase in capital equipment and labor must be
created equal to the desired growth rate (warranted). rate of growth). Therefore, in
relation to regional economic development, the opening of the economy of a region is
very important because it will facilitate the movement of capital and labor equipment
from one region to another so that full use of capital tools and employment opportunities
can occur from time to time. (Kuncoro, 1919) says that the new paradigm of regional
economic development for job opportunities is that jobs must develop jobs that are
suitable for local residents.
Various theories of economic growth that have been described are able to explain
the state of the economy in TTS Regency (Sanam, Nugraha, & Rero, 2021). The
importance of finding the base/leading sector to increase the distribution of income from
outside the region, observing the components that affect employment absorption,
observing production growth associated with labor productivity and labor elasticity..
Category
Description
2017
2018
2019
2020
Average
1
Agriculture, Forestry, Plantation ,
Fishery/Agriculture, Forestry,
Estate,Fishery
-0,92
-6,13
3,57
2,12
-0,3
2
Mining And Quarrying
2,00
3,83
6,81
0,10
3,2
3
Manufacturing Industry
2,62
0,78
3,63
10,82
4,5
4
Electricity, Gas and Water/Electricity,
Gas and Water
-3,65
1,55
-3,62
-3,01
-2,2
5
Building/Construction
-2,73
4,55
11,11
0,56
3,4
6
Wholesale And Retail Trade,
Restaurant/Wholesale And Retail Trade,
Restaurant
0,44
0,76
3,45
4,05
2,2
7
Transportation, Warehousing,
Communication / Transportation,
Communication, Warehousing
-7,40
0,25
4,56
6,22
0,9
8
Finance, Insurance, Rental and Building
Business, Land, and Corporate Services /
Financing, Insurance, Real Estate and
Business Services
11,76
-2,63
0,12
10,14
4,8
9
Community, Social, and Personal
Services
-1,89
0,01
2,25
-4,66
-1,1
Total
0,88
1,64
-0,35
1,76
1,0
Novi T. Kiak, Marselina Ratu, Maria I. H. Tiwu, Olivia Louise Eunike Tomasowa
Analysis of Labor Absorption In East Nusa Tenggara Province 2016-2020 Period 180
Based on the theories that have been put forward, that the basis for developing the
regional economy lies in the ability of the region to grow and develop in accordance with
its endowment factors. The success of development is also shown by the creation of job
opportunities that can provide welfare for the community (Nunan, 2014).
Based on the results of the discussion, it can be said that there are still gaps in
economic growth. Manpower is one of the important components in the economic growth
of a region, in TTS Regency the absorption rate of its workforce is not followed by
increasing labor productivity in the economic sector. This shows that the development of
economic sectors to maximize employment is needed to create a balanced economic
system.
CONCLUSION
The results of this study indicate that transportation and warehousing are the most
superior sector in employment and the sector that has the highest elasticity value so that
the Finance, Insurance, Rental and Building Business, Land, and Corporate Services
sectors have a major influence on economic growth and absorption. labor. In terms of
labor productivity in the Finance, Insurance, Rental and Building Business, Land, and
Corporate Services sectors/business fields, the total output/production continues to
increase with an average growth during that period of 942.5. The sectors/ business fields
of Finance, Insurance, Rental and Building Business, Land, and Corporate Services in
East Nusa Tenggara Province showed the highest productivity with 297.74
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