Abstract:
The problem of unemployment is an important concern for local governments. The
average of an open unemployment rate in Sumatra Island in 2014-2019 was 5.4%
which was still above the national target of 4.8%. The factors that are thought to
have an effect are population density, economic growth, labor force participation
rate, and regional minimum wage. In this study, panel data from 2014-2019 were
used in 10 provinces on the island of Sumatra. The scatter diagram of each variable
does not show a certain pattern so that spline truncated nonparametric regression
was used. This regression is also carried out by looking at the optimum knot point
of the generalized cross validation value. The study shows that the variables that
have a significant effect are population density, labor force participation rate, and
regional minimum wage. The variable that does not have significant effect is
economic growth.
