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An Analysis of Employment and Growth in Java after the Economic Crisis 1997/1998: Examining the Role of Farm Activities in West Java

Hirawan, Fajar Bambang (2008): An Analysis of Employment and Growth in Java after the Economic Crisis 1997/1998: Examining the Role of Farm Activities in West Java.

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Abstract

In this paper, we examine the relationship between employment and economic growth in the most populated island in Indonesia, Java, specifically in West Java. When Indonesia suffered a dreadful economic crisis during 1997/1998, none of the regions or sectors survived its impact, especially farm and non-farm activities. The economy started to improve in the year 2000, but non-economic fundamental factors significantly impacted the economy at that time. The results of this paper indicate that employment has a relationship to economic growth. In West Java farm activities, which are agriculture, livestock, forestry, and fisheries (ALFF), have a negative correlation with economic growth. On the other hand, non-farm activities have a positive correlation with economic growth. The value of the coefficient of variation (CV) surprisingly signifies that employment and GDP relating to farm activities in West Java are more stable than non-farm activities after the economic crisis of 1997/1998.

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