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Regional unemployment dynamics in Indonesia: serial persistence, spatial dependence, and common factors

Author

Listed:
  • Carlos Mendez

    (Nagoya University)

  • Tifani Husna Siregar

    (Waseda University)

Abstract

We analyze the space-time dynamics of Indonesia’s provincial unemployment by simultaneously accounting for their serial persistence, spatial dependence, and common factors. The results show that unemployment rates vary widely across provinces, but have similar patterns over time, indicating the presence of common latent factors. Using the average national unemployment rate as a proxy for common factors, the results indicate that the space-time dynamics of provincial unemployment are characterized by both significant serial persistence and spatial dependence. The results also quantify which regions are most sensitive to national unemployment shocks, providing a deeper understanding of regional unemployment heterogeneity.

Suggested Citation

  • Carlos Mendez & Tifani Husna Siregar, 2023. "Regional unemployment dynamics in Indonesia: serial persistence, spatial dependence, and common factors," Letters in Spatial and Resource Sciences, Springer, vol. 16(1), pages 1-20, December.
    • Handle: RePEc:spr:lsprsc:v:16:y:2023:i:1:d:10.1007_s12076-023-00364-6
    DOI: 10.1007/s12076-023-00364-6
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    References listed on IDEAS

    as
    1. Tifani Husna Siregar, 2022. "Investigating the Effects of Minimum Wages on Employment, Unemployment and Labour Participation in Java: A Dynamic Spatial Panel Approach," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 58(2), pages 195-227, May.
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    4. M. Hashem Pesaran, 2015. "Testing Weak Cross-Sectional Dependence in Large Panels," Econometric Reviews, Taylor & Francis Journals, vol. 34(6-10), pages 1089-1117, December.
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    More about this item

    Keywords

    Regional unemployment; Cyclical sensitivity; Spatial dependence; Serial persistance; Common factors; Indonesia;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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