Labor Demand and the Elasticity of Job Opportunity: Evidence from Indonesia

Abstract

Objective - Labor is one of the most important factors in production activities. Increased human effort in the production process will increase output, productivity and promote economic growth. This research aims to analyze the condition and potential of labor demand in Pontianak City, analyze job opportunities in Pontianak City and formulate a strategy of labor policy in Pontianak City. Methodology/Technique - The method used is descriptive with quantitative analysis which a qualitative interpretation. The data used is secondary data and related documents for data enrichment. Findings - The results show that: labor demand is showing an increasing trend year by year, increasing employment absorption from 233,788 in 2010 to 244,236 in 2014. The rate of absorption growth occurs primarily in the agriculture, building and transportation industries. Employment elasticity in Pontianak City is relatively low at only 0.02% which means the growth of labor absorption is smaller than the increase of economic growth. Novelty - This research shows that employment policy strategies in Pontianak City need to increase the role of Training Center (BLK), the enrichment of nutrition improvement and sustainability, encourage investment, increase competitiveness through increasing labor productivity and increase labor flexibility to the rules among other things. Type of Paper: Empirical. Keywords: Employment Demand; Employment Elasticity; Employment Policy Strategy. JEL Classification: J20, J21, J29.