The Link between Fiscal Decentralization and Unemployment Evidence from Indonesia

The Link between Fiscal Decentralization and Unemployment Evidence from Indonesia

Authors

  • Sri Maryanti Universitas Lancang Kuning
  • Hefrizal Handra Fakultas Ekonomi dan Bisnis Universitas Andalas Padang
  • Efa Yonnedi Fakultas Ekonomi dan Bisnis Universitas Andalas Padang

DOI:

https://doi.org/10.54099/aijbs.v2i2.314

Keywords:

Fiscal Desentralisation, Unemployment. APBD Allocation

Abstract

The purpose of this study is to see the relationship between fiscal decentralization and unemployment in Indonesia, in this study uses panel data from 2017-2021. Where the results show that fiscal decentralization has a relationship with unemployment, but on the other hand, the level of civility and regional dependence to reduce unemployment has a negative impact, but the allocation of APBD funds is by existing regulations but still needs supervision from the central government and the area itself. Each region should seek to increase investment to reduce unemployment so that it can create jobs.

References

Agénor, P. R., & Lim, K. Y. (2018). Unemployment, growth and welfare effects of labor market reforms. Journal of Macroeconomics, 58, 19–38. https://doi.org/10.1016/j.jmacro.2018.08.009

Akhmad, Noer Azam Achsani, M. T. and S. A. M. 1School. (2012). The Impact of Fiscal Policy on the Regional Economy: Evidence from South Sulawesi, Indonesia. International Review of Social Sciences and Humanities, 4(1), 142–150.

Albertini, J., Auray, S., Bouakez, H., & Eyquem, A. (2020). Taking off into the wind: Unemployment risk and state-Dependent government spending multipliers. Journal of Monetary Economics, xxxx. https://doi.org/10.1016/j.jmoneco.2020.07.007

Assaad, R., Krafft, C., & Yassin, S. (2020). Job creation or labor absorption? An analysis of private sector job growth in Egypt. Middle East Development Journal, 12(2), 177–207. https://doi.org/10.1080/17938120.2020.1753978

Badung, K. (2022). Daerah paling mandiri 2021.

Chletsos, M., & Sintos, A. (2022). The effects of IMF conditional programs on the unemployment rate. European Journal of Political Economy, xxxx, 102272. https://doi.org/10.1016/j.ejpoleco.2022.102272

Durand-Lasserve, O. (2022). Nationalization of the private sector labor force, quotas, matching and public jobs, an illustration with Saudi Arabia. Quarterly Review of Economics and Finance, 86, 98–117. https://doi.org/10.1016/j.qref.2022.06.004

Guo, S., Pei, Y., & Xie, Z. (2022). A dynamic model of fiscal decentralization and public debt accumulation. Journal of Public Economics, 212, 104692. https://doi.org/10.1016/j.jpubeco.2022.104692

Hasna, S., & Novitasari, D. (2018). Analisa Keuangan Daerah dan Pengangguran dalam Mempengaruhi Kinerja Ekonomi di Provinsi Banten. Simposium Nasional Keuangan Negara., 801–820.

Hastuti, P. (2018). DESENTRALISASI FISKAL DAN STABILITAS POLITIK DALAM KERANGKA PELAKSANAAN OTONOMI DAERAH DI INDONESIA. Simposium Nasional Keuangan Negara, 1(1), 785–787. https://jurnal.bppk.kemenkeu.go.id/snkn/article/view/293

Lewis, B. D., & Oosterman, A. (2009). The impact of decentralization on subnational government fiscal slack in Indonesia. Public Budgeting and Finance, 29(2), 27–47. https://doi.org/10.1111/j.1540-5850.2009.00927.x

Mahdavi, S., & Alanis, E. (2013). Public expenditures and the unemployment rate in the American states: Panel evidence. Applied Economics, 45(20), 2926–2937. https://doi.org/10.1080/00036846.2012.690849

Maryanti, S. (2012). Analisis Perencanaan Tenaga Kerja Terhadap Kebutuhan Tenaga Kerja Di Provinsi Riau Tahun 2006-2010. Pekbis Jurnal.

Mergele, L., & Weber, M. (2020). Public employment services under decentralization: Evidence from a natural experiment. Journal of Public Economics, 182, 1–45. https://doi.org/10.1016/j.jpubeco.2019.104113

Muda, I., Bukit, R., Utara, S., Need, F., Control, I., Transfer, P. I., & Performance, F. (2014). The Effect Of Fiscal Potential , Fiscal Needs And Internal Control On The Provincial Intergovernmental Transfer Allocation In The Districts / Cities In North Sumatera – Indonesia . International Journal of Management and Business Research, 10, 22–35.

Murwirapachena, G., Choga, I., Maredza, A., & Mavetera, N. (2013). Fiscal policy and unemployment in South Africa: 1980-2010. Mediterranean Journal of Social Sciences, 4(6), 579–587. https://doi.org/10.5901/mjss.2013.v4n6p579

Nurhemi, G. S. (2015). Dampak Otonomi Keuangan Daerah Terhadap Pertumbuhan Ekonomi. Dampak Otonomi Keuangan Daerah Terhadap Pertumbuhan Ekonomi Di Indonesia, 183–206.

Oates, W. E. (1999). An Essay on Fiscal Federalism. Journal of Economic Literature, 37(3), 1120–1149. http://www.jstor.org/stable/2564874

Onwuka, C. E. (2021). the Impact of Fiscal and Monetary Policy on Unemployment Rate in Nigeria. SSRN Electronic Journal, August. https://doi.org/10.2139/ssrn.3959996

Pramusinto, N.D, & Daerobi, A. (2020). Labor Absorption of the Manufacturing Industry Sector in Indonesia. Budapest International Research and Critics Institute-Journal (BIRCI-Journal), 3(1), 549–561.

Pramusinto, Novia Dani, & Mulyaningsih, T. (2019). Permintaan dan Penawaran Tenaga Kerja serta Pengangguran di Indonesia. Seminar Bisnis Magister Manajemen “Membangun Ekonomi Kreatif Yang Berdaya Saing,” 233–243. https://publikasiilmiah.ums.ac.id/bitstream/handle/11617/11089/18. Novia dam Akhmad_.pdf?sequence=1&isAllowed=y

Putro, R. P. (2016). Pengaruh Desentralisasi Fiskal Terhadap Tingkat Pengangguran di Wilayah Sumatera. Indonesian Treasury Review Jurnal Perbendaharaan Keuangan Negara Dan Kebijakan Publik, 1(2), 81–95. https://doi.org/10.33105/itrev.v1i2.53

Saputri, G. (2021). Pengaruh Desentralisasi Fiskal Terhadap Tingkat Pengangguran di Provinsi Lampung Menurut Perspektif Ekonomi Islam. Skripsi, 1–116. http://repository.radenintan.ac.id/17955/

Setiawan, F., & Aritenang, A. F. (2019). The impact of fiscal decentralization on economic performance in Indonesia. IOP Conference Series: Earth and Environmental Science, 340(1). https://doi.org/10.1088/1755-1315/340/1/012021

Siburian, M. E. (2022). The link between fiscal decentralization and poverty – Evidence from Indonesia. Journal of Asian Economics, 81(April), 101493. https://doi.org/10.1016/j.asieco.2022.101493

Downloads

Published

2022-11-07

How to Cite

Maryanti, S., Handra, H. ., & Yonnedi, E. . (2022). The Link between Fiscal Decentralization and Unemployment Evidence from Indonesia: The Link between Fiscal Decentralization and Unemployment Evidence from Indonesia. ADPEBI International Journal of Business and Social Science, 2(2), 107–119. https://doi.org/10.54099/aijbs.v2i2.314