The Determinant of Regional Unemployment in Indonesia: The Spatial Durbin Models

Eka Khaerandy Oktafianto, Noer Azam Achsani, Tony Irawan


Unemployment is a problem that occurs in many countries and often gets special attention both from policymakers and academics. This fact is because if not addressed, it will cause socio-economic problems in the country. Therefore it is necessary to formulate the causes of unemployment by involving spatial aspects to avoid biased and inefficient estimates. This study aims to find the determinants of unemployment rates in Indonesia, including calculating the direct and indirect effect of using the spatial Durbin models (SDM) in the period 2000-2017. The results of this study indicate that the overall independent variables used significantly influence the unemployment rate in Indonesia. Besides, it turns out that the higher education variable completed by the population of a region has the most significant impact both in decreasing unemployment in a region and neighboring regions. Therefore, the policy taken should pay attention to this.


regional unemployment; spatial durbin model; direct and indirect effect

Full Text:



Anselin, L., & Bera, A.K. (1998). Spatial Dependence in Linear Models Regression Spatial With An Introduction to Econometrics. In Ullah, A., & Giles, D. E. A (Eds). Handbook of Applied Economics Statistics, New York: Dekker.

Arifatin, D. (2018). Analisis Spasial Data Panel Untuk Mengkaji Faktor-Faktor yang Mempengaruhi Kunjungan Wisatwan Mancanegara di Indonesia Tahun 2011-2015 (Spatial Analysis of Panel Data to Assess Factors Affecting Foreign Tourist Visits in Indonesia in 2011-2015). Unpublished Thesis. Bogor: Bogor Agricultural University.

Biagi, F., & Lucifora, C. (2008). Demographic and Education Effects on Unemployment in Europe. Labour Economics, 15(5), 1076-1101. 09.006.

Cracolici, M.F., Cuffaro, M., & Njkamp, P. (2007). A Geographical Distribution of Unemployment: An Analysis of Provincial Difference in Italy. Growth and Change Journal, 38 (4), 649-670.

Eggert, W., Krieger, T., & Meier, V. (2010). Education, Unemployment, and Migration. Journal of Public Economics, 94(5-6), 354-362. 01.005

Elhorst, J.P. (2003). The Mystery of Regional Unemployment Differentials: Theoretical and Empirical Explanation. Journal of Economics Survey, 17(5), 709-748.

Elhorst, J.P. (2010). Applied Spatial Econometrics: Raising the bar. Spatial Economics Analysis, 5 (1), 9-28.

Elhorst, J.P. (2014). Spatial Panel Data Models. Handbook of Regional Science. Springer: Berlin pp. 1637-1652.

Filiztekin, A. (2008). Regional Unemployment in Turkey. Papers in Regional Science, 88(4), 863-873.

Guclu, M. (2017). Regional Unemployment Disparities in Turkey. Romanian Journal for Economic Forecasting, 20(2), 94-108.

Hall, C. (2016). Does More General Education Reduce the Risk of Future Unemployment? Evidence from an Expansion of Vocational Upper Secondary Education. Economics of Education Review, 52, 251-271.

Ilahi, R., Shamsuddin, M., & Suparman, M. (2017). Spatial Durbin Model Fix With Unemployment Rate in Effect for Bangka Belitung. Unpublished Thesis. Bandung: University of Padjadjaran.

Kiral, E., & Mavruk, C. (2017). Regional Unemployment Disparities in Turkey. Finans Politics and Economics Yorumlar, 54(634), 107-134.

Kose, S., & Gunes, S. (2013). Regional Disparities and Persistence assesing The Evidence From Greek Regions, 1991-2008. Regional and Sectoral Economics Studies, 12(1), 55-77.

Lavrinovicha, I., Lavrinenko, O., & Teivans-Treinovskis, J. (2015). Influence of Education on Unemployment Rate and Incomes of Residents. Procedia Social and Behavioral Sciences, 174, 3824-3831.

LeSage, J. P, & Pace, R. K. (2009). Introduction to Spatial Econometrics, 1st Edition. New York: Chapman & Hall/CRC.

Lopez-Bazo, E., Barrio, T. D., & Artis, M. (2002). The Regional Distribution of Spanish Unemployment: A Spatial Analysis. Paper in Regional Science, 81 (2), 365-389.

Lottmann, F. (2012). Explaining Regional Differences Unemployment in Germany: A Spatial Panel Data Analysis. Discussion Paper No.26, SFB 649.

Mondschean, T., & Oppenheimer, M. (2011). Regional Long-Term and Short-Term Unemployment and Education in Transition: The Case of Poland. The Journal of Economic Asymmetries, 8(2), 23-48.

Riddell, W. C., & Song, X. (2011). The Impact of Education on Unemployment Incidence and Re-employment Success: Evidence from the U.S. Labour Market. Labour Economics, 18(4), 453-463.

Snieska, V., Valodkiene, G., Daunoriene, A., & Draksaite, A. (2015). Education and Unemployment in European Union Economic Cycles. Proecedia Social and Behavioral Scienes, 213, 211-216.

Soekarni, M., Sugema, I., & Widodo, P.R. (2009). Strategy on Reducing Unemployment Persistence: A Micro Analysis in Indonesia. Bulletin of Monetary Economics and Banking, 12(2), 161-206.

Sukirno, S. (2008). Ekonomi Pembangunan (Development Economics). Jakarta. Erlangga.

Taylor, J., & Bradley, S. (1997). Unemployment in Europe: A Comparative Analysis of Regional Disparities in Germany, Italy and UK. Kyklos 50 (2), 221-245.

Vega, S. H., & Elhorst, J. P. (2013). On Spatial Econometric Models, Spillover Effects, and W. 53rd Congress of European Regional Science Association (ERSA): Conference papers, Econstor, 1-28.

DOI: Abstract - 0 PDF - 0


  • There are currently no refbacks.

View My Stats