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How Leading Economic Sectors Stimulate Economic Growth, Income and Labor Absorption? Input - Output Approach

Author

Listed:
  • Mardalena Mardalena

    (Departement of Economic Development, Faculty of Economics, Universitas Sriwijaya, Indonesia,)

  • Ardi Adji

    (Researcher in Indonesian Central Statistic Institution, Indonesia.)

  • Suhel Suhel

    (Departement of Economic Development, Faculty of Economics, Universitas Sriwijaya, Indonesia,)

  • Sri Andaiyani

    (Departement of Economic Development, Faculty of Economics, Universitas Sriwijaya, Indonesia,)

Abstract

Indonesia as emerging market economics provide some policies that leads to pro-growth, pro-poor and pro-job. This study aims to analyze which sectors are able to stimulate economic growth, household income, and labor absorption in South Sumatera Province. We analyze Input-Output Analysis which was estimated using RAS method. The analysis of output multiplier number used in this study to determine which sectors trigger the economic growth. At other hand, the income multiplier number is used in determining which sectors generate the income level, while the employment multiplier number determines he highest labor-absorbing economic sector. In the result, there are five economic sectors which is the main driver of economic growth : (1) Industry of coal and fuel refinery; (2) Industry of metal, computers, electronics, optical and electricity equipment; (3) industry of foods and beverages; (4) Farms and livestocks; (5) Electricity and gas installment, ice production, water supply and recycle of garbage. The five leading economic sectors generating the labor income increasement are : (1) administration of government, national defense and mandatory social security; (2) service of education, health and social activities; (3) rail transportation; (4) service of financial brokerage, insurance, pension fund and financing supports; (5) mining and quarrying of miscellaneous materials. The five leading economic sectors generating the absorption of labor force are : (1) other services; (2) plantation; (3) farmings and livestocks; (4) foods agricultural; and (5) forestry and logging. The direction of economic transformation in South Sumatera Province should tribute attention to the importance of pro-growth, pro-poor, pro-job policy.

Suggested Citation

  • Mardalena Mardalena & Ardi Adji & Suhel Suhel & Sri Andaiyani, 2019. "How Leading Economic Sectors Stimulate Economic Growth, Income and Labor Absorption? Input - Output Approach," International Journal of Economics and Financial Issues, Econjournals, vol. 9(1), pages 234-244.
    • Handle: RePEc:eco:journ1:2019-01-29
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    References listed on IDEAS

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    1. C. Peter Timmer, 2008. "Agriculture and Pro-Poor Growth: An Asian Perspective," Asian Journal of Agriculture and Development, Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA), vol. 5(1), pages 1-27, June.
    2. Syrquin, Moshe & Chenery, Hollis, 1989. "Three decades of industrialization," MPRA Paper 32771, University Library of Munich, Germany.
    3. Charles I. Jones, 2011. "Misallocation, Economic Growth, and Input-Output Economics," NBER Working Papers 16742, National Bureau of Economic Research, Inc.
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    Cited by:

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    Keywords

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    JEL classification:

    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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