DETERMINASI TINGKAT PENGANGGURAN TERBUKA DI INDONESIA MELALUI TINGKAT PARTISIPASI ANGKATAN KERJA DAN PENDIDIKAN

Abstract

This study aims to analyze the effect of the Labor Force Participation Rate (LFPR) and education level on the Open Unemployment Rate in Indonesia during the 2004–2023 period. Unemployment remains an important issue in Indonesia’s economic development due to labor market dynamics, the increasing number of labor force participants, and the quality of human resources. This research uses annual secondary data obtained from the World Bank and applies a quantitative approach through multiple linear regression analysis using the Ordinary Least Squares (OLS) method. The dependent variable in this study is the Open Unemployment Rate, while the independent variables are the Labor Force Participation Rate and education level. Classical assumption tests, including normality, multicollinearity, heteroscedasticity, and autocorrelation tests, were also conducted to ensure the validity of the regression model. The results show that the Labor Force Participation Rate and education level have a negative and significant effect on the Open Unemployment Rate, both partially and simultaneously. The findings indicate that higher labor force participation and better education levels contribute to reducing unemployment in Indonesia. However, improvements in labor quality and participation must be supported by sustainable job creation and labor market expansion. Therefore, integrated policies related to education improvement and employment opportunities are needed to support sustainable economic development in Indonesia.