EDUCATED UNEMPLOYMENT IN WEST SUMATERA: DETERMINANTS DURING THE DEMOGRAPHIC BONUS PERIOD 2020-2024

Abstract

Indonesia has experienced a demographic bonus since 2012 and West Sumatera Province was among the earliest provinces to enter this phase.  West Sumatra is expected to exit the demographic bonus in 2030, with its dependency ratio approaching 50. However, its workforce potential has not been optimally utilized, as reflected in the high level of open unemployment, especially among high school graduates or equivalent. This study aims to examine the unemployment rate of educated people of productive age in West Sumatra Province. Secondary data comes from the West Sumatra BPS for 2020-2024. The analysis uses a panel data regression approach. The model used was the Fixed Effect Model (FEM) with E-views software. The analysis showed that increases in the population dependency ratio, the contribution of the agricultural sector, the informal sector, and economic growth significantly reduced the educated unemployment rate. Conversely, the contribution of the industrial sector and wage increases actually increased educated unemployment. This study recommends that the government expand labor-intensive industries, provide skills training for graduates, and develop institutions for millennial farmers by strengthening agro-industrial areas capable of creating new jobs.