Abstract

Ade Komaludin

The purpose of this study is to find out and to analyze: (a) How the influence of Foreign Direct Investment (FDI) on employment in Indonesia during the period of 2010 to 2019, (b) Which type of investment was dominantly affecting labor absorption in Indonesia during the period of 2010 - 2019, (c) How is the responsiveness of labor demand to Foreign Direct Investment (FDI), Domestic Direct Investment (DDI), Gross Domestic Product (GDP), interest rates, and nominal exchange rates, and (d) How is the stability of labor demand function during the period of 2010-2019. By using the time series data test, the study concluded that: (a) Foreign Direct Investment (FDI) had a significant positive effect on labor demand, (b) it turned out that FDI was more dominant in its influence on labor demand compared to DDI, (c) Demand for labor was more responsive (elastic) to FDI, GDP and nominal exchange rates, but less responsive (inelastic) to DDI and interest rates, and (d) The function of labor demand turns out that during the period of 2010 to 2019 was stable. This means that labor demand in the long run is relatively consistent.