Analysis of the Effect of Labor Force Participation Rate and Years of Education on Open Unemployment Rate: A Study on Human Resource Management in Lampung Province

Abstract

This study aims to examine the influence of the Labor Force Participation Rate (LFPR) and average years of education on the Open Unemployment Rate (OUR) in Lampung Province, Indonesia, within the framework of human resource management. Utilizing multiple regression analysis on secondary data from official sources, the research assesses both partial and simultaneous effects of LFPR and education on unemployment. The findings reveal that LFPR negatively and significantly affects OUR, where a one-unit increase in LFPR reduces unemployment by 0.244 units (p = 0.006). Conversely, the average years of education show a positive and significant correlation with unemployment, with each additional year increasing OUR by 0.702 units, indicating a mismatch between educational output and labor market demand. The model explains 62.8% of the variation in unemployment rates, highlighting the complex dynamics of workforce participation and education on employment. This study underscores the critical need for aligning educational curricula with market requirements and improving job readiness to effectively reduce unemployment. The results offer valuable insights for policymakers and human resource managers aiming to optimize labor productivity and address unemployment challenges in developing regions.