Menguji Validitas Hukum Okun di Indonesia Tahun 1992-2016

Unemployment is among the major problems not only in less developed and developing countries but in developed countries as well. This paper provides an assessment of the unemployment, inflation rate and economic growth by examining the validity of okun’s law and phillips curve in Indonesia. Using the time series data from 1992-2016, the data obtain from World Bank. An additional explanatory variabel age dependency ratio, was introduced to investigate of unemployment which is based on premis that a high age dependency ratio would result to lower unemployment. The analysis model used in this research is Error Correction Model (ECM). The result of this study is inflation rate, economic growth and age dependency ratio was found to be positively related with unemployment, it confirming that okun’s law and phillips curve not valid in Indonesia for the period 1992-2016