DETERMINANTS OF REGENCY/CITY MINIMUM WAGES IN CENTRAL JAVA: A PANEL DATA APPROACH
Keywords:
Regency/city minimum wage, Panel Data Regression, Fixed Effect ModelAbstract
The regency/city minimum wage in Central Java Province is still relatively low and uneven, potentially impacting worker welfare. This study aims to analyze the factors influencing the minimum wage using panel data regression with the Fixed Effect Model (FEM) selected based on the Chow and Hausman tests. The independent variables include population, average years of schooling, Labor Force Participation Rate (LFPR), and Gross Regional Domestic Product (GRDP). The results show that average years of schooling, LFPR, and GRDP have a positive and significant effect on the minimum wage. The model is able to explain 92.42% of the variation in the minimum wage.
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References
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