Analysis of Labor Demand and Supply in North Sumatra

Matondang, Muhammad Alhasymi and Ruslan, Dede and Maipita, Indra (2020) Analysis of Labor Demand and Supply in North Sumatra. In: Proceedings of The 5th Annual International Seminar on Transformative Education and Educational Leadership (AISTEEL), 22 September 2020, Medan.

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Abstract

The availability of a large number of workers in North Sumatra can be seen from the level of labor force participation which continues to increase from year to year. Where an increase in the availability of the number of workers must be followed by an increase in the availability of jobs that can be seen from the level of demand and supply of the number of workers. This study aims to analyze the factors that can affect the demand and supply of labor in North Sumatra. The method of analysis used is the Two-Stage Least Square (2SLS) method using time series data from 1999-2019. The estimation results show that from the demand side, the minimum wage variable has a negative effect on labor demand, while the Regional GDP, Investment, Labor Productivity, and inflation variables have a positive effect on labor demand. Meanwhile, the estimation results of the supply of labor show that the minimum wage, the level of labor force participation, and household consumption has a positive effect on the level of labor supply in North Sumatra

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