Economic Growth in East Java: How Significant is the Role of the Non-agricultural Sector?

This study seeks to analyze the impact of the non-agricultural sector on economic growth in East Java over the last decade (2013-2023). Utilizing panel data regression analysis on 38 regencies and cities within East Java Province for the period of 2013-2023, the research identifies the leading economic sector for each district/city, distinguishing between the non-agricultural and agricultural sectors. The variables incorporated in this study include: (i) the leading economic sector of each district/city, (ii) the leading labor sector, (iii) the average years of schooling of the population, and (iv) the total labor force in each district/city. The findings indicate that districts/cities where the non-agricultural sector is dominant are more likely to experience higher rates of economic growth compared to those where agriculture constitutes the primary economic activity.