Factors that Influence the Rate of Unemployment in Indonesia

This research was aimed at analyzing the effect of urbanization, industrialization, labor force level, the elasticity of labor force and minimum regional wage rate in Indonesia. The analysis technique used were descriptive and multiple linear regression. The result on α = 5% shows that the labor force variable was significant to unemployment level in Indonesia. Industrialization shows a positive effect and non-significant to unemployment level, it means that the capability of industrial sector is lower in reducing unemployment compared with agricultural sector and service sector. The elasticity of labor force is negative and non-significant to unemployment sector. The result of regression shows that the elasticity of labor force is non-significant to unemployment level. The variable of minimum regional wage rate shows negative effect and non-significant to unemployment level means that the wage rate is not invisible.