Determinants of Unemployment in Indonesia : A Study on Development Program of Rural Employment in Pinrang District, South Sulawesi

Unemployment issue is one of the main problems in developing countries economy, and Indonesia is no exception. Therefore, it is necessary to have a development plan in encouraging employment creation and demand for labor. The orientation of human investment produces human capital accumulation through education, skills training and work experience of labor, which in turn creates skilled labor and enlarges source of employment. Two specific objectives of the research are ; (1) to identify determinants of unemployment ; and (2) to formulate the programs dealing with labor development and rural employment. It is expected that, the results of analysis could provide crucial information in synthesizing employment development programs in the region. The research was conducted in the three sub-districts of Pinrang District, South Sulawesi Province, Indonesia by interviewing the labors randomly. There are three basic criterions of selecting research sites. These criterions are ; coastal area (Criterion 1, C1), low mountainous area (Criterion 2, C2) and urban area (Criterion 3, C3). In order to satisfy the criterions, Paleteang Sub-district for C1 (25 labors), Lembang Sub-district for C2 (24 labors), and Mattirosompe Sub-district for C3 (20 labors) were selected. Thus, the total sample size is 69 labors. Descriptive Method by using Cross Tabulation and Graph were employed to analyze and describe the determinants of unemployment. Some principal findings include ; first, the determinants of unemployment are (1) most of the job seekers are willing to work only in the formal sector, especially a civil servant (PNS) ; (2) low level of wages ; (3) seasonal jobs or contract system ; (4) the lack of access to the employment information ; (5) working in the other regions. Second, the labor development programs (training) which were done by both the government and private sectors are beneficial for the labor. Third, developing self-employ can be strongly expected to create a various source of employments and in turn encouraging economic growth. This implies that the employment development program should be skills increasing-oriented and self-employ development facility based, as well as labor-oriented investment