AN ANALYSIS OF THE FACTORS INFLUENCING EDUCATED UNEMPLOYMENT IN CENTRAL JAVA

Central Java has the third-highest number of unemployed among Indonesian provinces, with higher education graduates comprising 57.54% of the total unemployed population in 2023. This study analyzes the effects of investment, regional government expenditure, economic growth, the number of industries, and district minimum wages on educated unemployment in Central Java. Using a quantitative approach with secondary data from BPS, the study covers 35 districts/cities from 2019 to 2023. Panel data regression with a Fixed Effect Model is applied. The findings reveal that investment and economic growth have a negative and significant effect on educated unemployment. Conversely, the number of industries and district minimum wages have a positive and significant effect on educated unemployment. Meanwhile, regional government expenditure does not have a significant effect on educated unemployment. This study recommends: (1) Local governments should continuously promote a conducive investment climate through streamlined licensing processes, legal certainty, and improved infrastructure development. (2) Economic growth should be enhanced, particularly in sectors with a high absorption capacity for higher education graduates, such as modern services, finance, and the creative industry. (3) Local governments need to actively support the development of technology-based and innovation-driven industries that can generate more employment opportunities for university graduates. (4) Greater caution is needed when setting district minimum wage policies to ensure a fair balance between the interests of employers and workers.