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The Effect of Human Capital Expenditure on Labor Productivity in Central Java Province

In: Proceedings of the International Conference on Economics and Business Studies (ICOEBS-22-2)

Author

Listed:
  • Nurul Huda Nafi’ Maula

    (Universitas Muhammadiyah Surakarta, Faculty of Economics and Business)

  • Muhammad Anas

    (Universitas Muhammadiyah Surakarta, Faculty of Economics and Business)

Abstract

Education and health are two essential aspects in improving the quality of human capital because higher education and good health make workers more productive. This study aims to estimate the direction and magnitude of the influence of human capital spending on labor productivity in Central Java Province in 2013–2019 using panel data regression using the Fixed Effects Model (FEM) approach and applying the chain rule method. The results of this study indicate that education spending positively affects the average length of schooling (RLS), and health spending positively impacts life expectancy (AHH). Then, RLS and AHH positively affect labor productivity in Central Java Province. Thus, it is proven that this study has a chain rule. The government expected to evaluate the use of education and health expenditure budgets. So that the RLS can be high and the AHH is also high.

Suggested Citation

  • Nurul Huda Nafi’ Maula & Muhammad Anas, 2024. "The Effect of Human Capital Expenditure on Labor Productivity in Central Java Province," Advances in Economics, Business and Management Research, in: Huda Maulana & Muhammad Sholahuddin & Muhammad Anas & Zulfikar Zulfikar (ed.), Proceedings of the International Conference on Economics and Business Studies (ICOEBS-22-2), pages 798-810, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6463-204-0_66
    DOI: 10.2991/978-94-6463-204-0_66
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