Spatial Regression Models on Factors Influencing Regional Minimum Wages

  • Muhammad Luthfi Setiarno Putera Institut Agama Islam Negeri Palangka Raya
Keywords: Regional Minimum Wages, SAR, SEM, Spatial Regression


Regional minimum wages might well represent the economic development of a region. The most likely spotlight province regarding the wage determination issue is East Java. This work is intended to obtain the best regression model on factors influencing East Java's regencies/cities' minimum wages in terms of spatial approach. The methods are Spatial Autoregressive (SAR) and Spatial Error Model (SEM). This study aims to obtain the best spatial model based on the factors influencing the regional minimum wage in districts/cities in East Java and the mapping. The data source is secondary data from Statistics Indonesia (BPS) of East Java. It consists of several variables, namely the Regional Minimum Wage, Total Working Population, Gross Regional Domestic Product, Total Population, and percentage of Population with a minimum education of senior high school. It shows that two significant factors are the number of working civilians and the percentage of high school-college graduates, affecting regional minimum wages. It proves that minimum wages among regions in East Java are spatially correlated with a closed area. Spatial regressions are the better ones than classic ones since they have higher R-sq and satisfy assumptions. Meanwhile, the selected model is SAR rather than SEM as it has a smaller AIC and explains variation better in minimum regional wages. It is indicated that some regions need more care due to small regional wages.


N. N. Charysa, “Pengaruh Pertumbuhan Ekonomi dan Inflasi terhadap Upah Minimum Regional di Kabupaten/Kota Provinsi Jawa Tengah Tahun 2008-2011,” Economic Development Analysis Journal, vol. 2, no.4, pp. 277-285, 2013.

F. Nurtiyas, “Analisis Faktor-faktor yang Mempengaruhi Upah Minimum Propinsi di Pulau Jawa Tahun 2010-2014,” Jurnal Pendidikan dan Ekonomi, vol. 5, no. 2, pp. 166-175, 2016.

T. B. Hartanto and S.U. Masjkuri, “Analisis Pengaruh Jumlah Penduduk. Pendidikan. Upah Minimum dan Produk Domestik Regional Bruto (PDRB) terhadap Jumlah Pengangguran di Kabupaten dan Kota Provinsi Jawa Timur Tahun 2010-2014,” Jurnal Ekonomi Terapan, vol. 2, no. 1, pp. 21-30, 2017.

R. Merdekawaty, D. Ispriyanti, and Sugito, “Analisis Faktor-faktor yang Mempengaruhi Upah Minimum Kabupaten/Kota di Provinsi Jawa Tengah Menggunakan Model Spatial Autoregressive (SAR),” Jurnal Gaussian, vol. 5, no. 3, pp. 525-534, 2016.

W. C. Liao and X. Wang, "Hedonic house prices and spatial quantile regression," Journal of Housing Economics, vol. 21, no. 1, pp. 16-27, 2012.

J. LeSage and R.K. Pace, "Introduction to Spatial Econometrics," Chapman and Hall, 2009.

L. Anselin, "Spatial Econometrics: Methods and Models," Springer, 1988.

A. S. Ahmar, Adiatma, and M. K. Aidid, "Crime Modeling using Spatial Regression Approach," Journal of Physics: Conference Series 954, 012013, 2018.

J. Susanto and D. W. Udjianto, "Human Capital Spillovers and Human Development Index in Yogyakarta Special Region and Central Java," International Journal of Innovation and Economic Development, vol. 5, no. 2, pp.57-64, 2019.

P. S. Kanaroglou, M. D. Adams, P. F. De Luca, D. Corr, and N. Sohel, "Estimation of sulfur dioxide air pollution concentrations with a spatial autoregressive model," Atmospheric Environment, vol. 79, pp. 421-427, 2013.

P. H. Idárraga, E. L. Bazo, and E. Motellón, "Regional Wage Gaps, Education and Informality in an Emerging Country:The Case of Colombia," Spatial Economic Analysis, vol.11, no.4, pp. 432-456, 2016.

U. S. Suharto and R. Dharmala, “Investasi Swasta. Upah Minimum Regional dan Pertumbuhan Industri Besar dan Sedang terhadap Penyerapan Tenaga Kerja di Provinsi Banten,” Jurnal Ekonomi-Qu, vol. 6, no. 1, pp.82-101, 2016.

M. L. S. Putera, “Peramalan Transaksi Pembayaran Non-Tunai Menggunakan ARIMAX-ANN dengan Konfigurasi Kalender,” BAREKENG: Jurnal Ilmu Matematika dan Terapan, vol.14, no. 1, pp. 135-146, 2020.

M. L. S. Putera, “Non-cash Payment Transaction Projection Using ARIMAX: Efect of Calendar,” Jurnal Matematika, Statistika dan Komputasi, vol. 16, no. 3, pp. 296-310, 2020.

C. Fang, H. Liu, G. Li, D. Sun, and Z. Miao, "Estimating the Impact of Urbanization on Air Quality in China using Spatial Regression Models," Sustainability, vol.7, pp.15570-15592, 2015.

A. F. Schmidt and C. Finan, "Linear Regression and the Normality Assumption," Journal of Clinical Epidemiology, vol. 98, pp. 146-151, 2018.

How to Cite
Putera, M. (2020). Spatial Regression Models on Factors Influencing Regional Minimum Wages. Numerical: Jurnal Matematika Dan Pendidikan Matematika, 4(2), 97-110.