Analysis of the Impact of Economic Growth on Unemployment Rates in Indonesia

Abstract

Economic growth is often considered as the solution to reduce unemployment in a country. However, the relationship between the two is not always simple, especially in developing countries such as Indonesia. This article aims to analyze the effect of economic growth on unemployment in Indonesia, considering various factors that influence these dynamics. Based on data on economic growth and unemployment rates in Indonesia in recent years, this article finds that although economic growth can create new jobs, the quality of growth and the absorption of economic sectors for labor greatly determine its impact on unemployment. Factors such as structural transformation, education and skills of the workforce, and macroeconomic policies also influence the effectiveness of economic growth in reducing unemployment. This article suggests that more inclusive economic policies, investment in vocational education, and strengthening labor-intensive sectors should be the main focus in efforts to overcome unemployment in Indonesia. Thus, sustainable and equitable economic growth can be achieved, while reducing inequality and unemployment in Indonesia