THE EFFECT OF GOVERNMENT EXPENDITURE AND PRIVATE INVESTMENT ON WORK OPPORTUNITIES AND UNEMPLOYMENT RATE IN INDONESIA

Sun’an M.

THE EFFECT OF GOVERNMENT EXPENDITURE AND PRIVATE INVESTMENT ON WORK OPPORTUNITIES AND UNEMPLOYMENT RATE IN INDONESIA

2018

Sun’an M.

This study aims to analyze the effect of government expenditure and private investment on employment and unemployment in Indonesia, and employment opportunities on the unemployment rate in Indonesia. The path analysis is used as a method of data analysis. The results show that government expenditure and private investment have a significant and positive correlation to employment; this means that an increase in government expenditure and private investment will increase employment as well. Furthermore, private investment has a significant and negative correlation to the unemployment rate; this means that, an increase in private investment will reduce the unemployment rate. Government expenditure has no effect on unemployment rate in Indonesia because government expenditure focuses on the development of basic infrastructure and has not yet targeted the economic activities of the community.

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