A MODIFIED GEOGRAPHICALLY AND TEMPORALLY WEIGHTED REGRESSION MODELING ON OPEN UNEMPLOYMENT RATE IN SOUTH SULAWESI

Abstract

The Open Unemployment Rate (OUR) in Indonesia is still a challenge despite a decline, namely 4.82% in February 2024 and around 7.2 million unemployed people. The main cause of the OUR is the imbalance between the number of the workforce and the availability of jobs. This issue is directly related to the Sustainable Development Goals (SDGs), especially Goal 8 which focuses on the creation of decent jobs and economic growth. South Sulawesi Province has experienced a spike in the OUR in the last five years, especially due to the Covid-19 pandemic which caused the poverty rate to decline to 6.31% in 2020. Along with economic recovery, this figure decreased to 4.19% in August 2024. Although low, the thickness of the layer remains a concern because 4 out of 100 people have not been absorbed in the labor market. Therefore, it is important to identify the factors that influence the OUR in South Sulawesi in order to design a reduction strategy. Various factors that influence the OUR include the human development index, percentage of poor people, average length of schooling, life expectancy, population density, and regional gross domestic product. To analyze the influence of these factors, this study uses the Geographically and Temporally Weighted Regression (GTWR) method which can capture spatial and temporal variations. Modifications are made using the Mahalanobis distance to consider inter-regional correlation and the Locally Compensated Ridge (LCR) approach to overcome high collinearity in the data. The data used comes from the Central Statistics Agency of South Sulawesi Province. Meanwhile, partial testing obtained each observation of the influencing factors varying from 2020 to 2023. In general, the factors that significantly influence the open poverty rate in South Sulawesi in 2020-2023 are the human development index, percentage of poor people, average length of schooling and life expectancy.

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