Analysis of the Influence of Investment, District Minimum Wage, Labor Force Participation Rate, and Average Years of Schooling on Economic Growth in Districts/Cities in Bengkulu Province

Abstract

This study's overarching objective is to ascertain the impact on economic development of Regencies/Cities in Bengkulu Province of the following variables: investment, labor force participation rate (LFPR), regency/city minimum wage (UMK), and average years of schooling (RLS). This research is explanatory research. The data utilized in this study are secondary data collected from various online sources, including the Central Statistics Agency of Bengkulu Province (https://bengkulu.bps.go.id) and the relevant agencies, covering the years 2017–2024 and encompassing nine regencies and one city in Bengkulu Province: South Bengkulu, Rejang Lebong, North Bengkulu, Kaur, Seluma, Mukomuko, Lebong, Kepahiang, Central Bengkulu, and Bengkulu City. Panel data regression is used in the study, with the Fixed Effect Model (FEM) being the optimal model chosen after the Chow and Hausman tests. The research found that the investment variable was the only one that contribute positively to the development of the Gross Regional Domestic Product of the regencies and cities in Bengkulu Province. Factors such as the UMK (minimum wage), LFPR (labor force participation rate), and RLS (Average Years of Schooling) neither partially nor entirely affected the outcome. Economic growth was affected by Investment, UMK, LFPR, and RLS all at once. The model could account for 98.03 percent of the variance in GDP growth. The program Eviews 12 was used to carry out the study.