Determinants of Poverty: The Role of Unemployment and Labor Force Participation in South Sulawesi

Abstract

This study examines the impact of the open unemployment rate (TPT) and labor force participation rate (Labor Force Participation Rate) on poverty in South Sulawesi from 2005 to 2024. Using quantitative methods and secondary data from the Central Bureau of Statistics (BPS), the analysis employs multiple linear regression. The results indicate that TPT has a significant positive effect on poverty, with a coefficient of 0.736 (p < 0.05), meaning that a 1% increase in TPT results in a 0.736% decrease in poverty. In contrast, the Labor Force Participation Rate has no significant influence on poverty (coefficient = -0.031, p > 0.05). Collectively, both variables explain 92.7% of the variation in poverty (R² = 0.927). The findings suggest that reducing unemployment through quality job creation is crucial for poverty alleviation, while merely increasing labor force participation is insufficient without supportive labor market conditions.