Analysis of Labor Demand and Supply in North Sumatra

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