Economic Growth and Human Development: Key Drivers of Informal Labor in South Sulawesi

Dirmansyah Darwin; I Made Jyotisa Adi Dwipatna

doi:10.59890/ijfbm.v4i2.205

Authors

Dirmansyah Darwin Universitas Negeri Makassar
I Made Jyotisa Adi Dwipatna Universitas Negeri Makasar

DOI:

https://doi.org/10.59890/ijfbm.v4i2.205

Keywords:

informal labor, poverty, economic growth, human development index

Abstract

This study aims to analyze the factors influencing the number of informal laborers in South Sulawesi Province during the period 2018-2024. Using a quantitative approach with a static panel data model, this research examines the influence of three main variables: poverty rate, Human Development Index (HDI), and economic growth on the number of informal laborers. The data used covers 24 regencies/cities in South Sulawesi with 168 observations. The results show that HDI and economic growth have a significant effect on informal labor, while the poverty rate does not show a significant effect in the chosen model. The best estimation model used is the Random Effects Model (REM), which provides stable and efficient estimates. These findings indicate that improvements in human development quality and increased economic growth can reduce dependence on the informal sector, while poverty is not always the main factor in determining informal employment. This study provides important insights for regional development policies in South Sulawesi to reduce labor disparities between the formal and informal sectors.

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