Determinants Of Labor Productivity In West Nusa Tenggara Province (Ntb)

Abstract

This study analyzes factors influencing labor productivity at the district and city level in West Nusa Tenggara Province during the 2019–2024 period. The variables examined include District/City Minimum Wage (UMK), Open Unemployment Rate (TPT), and Percentage of Poor Population (PPM). The research employs panel data from 10 districts/cities and analyzes them through panel data regression using EViews 12. Model selection was conducted using the Chow Test and Hausman Test, which established the Fixed Effect Model as the best model. Research findings indicate that UMK has a negative and insignificant effect on labor productivity. TPT has a negative and significant effect, while PPM has a positive and insignificant effect on labor productivity. Simultaneously, these three variables have a significant effect on labor productivity. These findings demonstrate that despite UMK increases across all districts/cities, labor productivity remains influenced by labor market conditions and variations in poverty levels across regions. The research results emphasize the need for employment policies based on regional characteristics through human resource quality improvement, productive employment creation, and strengthening of value-added sectors to promote increased labor productivity in West Nusa Tenggara Province.