The Effects of Economic Structure on Labor Force Participation In Sumatra: Panel Data Analysis For The 2016–2025 Period

Ratih Hetty Wardhani (Universitas Sriwijaya, Palembang, Indonesia)
Achmad Trisno Jati (Universitas Sriwijaya, Palembang, Indonesia)
Siti Rohima
Anna Yulianita (Universitas Sriwijaya, Palembang, Indonesia)
Muhammad Subardin (Universitas Sriwijaya, Palembang, Indonesia)

Danadyaksa: Post Modern Economy Journal
Vol. 4 No. 2 (2026): Post Modern Economy Journal

This study examines the effects of economic structure on labor force participation in ten provinces of Sumatra during 2016–2025. Using balanced panel data of 100 observations, the study applies a Fixed Effect Model (FEM). The results show that agriculture, forestry and fishing and manufacturing have positive and statistically significant effects on labor force participation, with probability values of 0.0014 and 0.0019, respectively. Mining and quarrying, construction, and wholesale and retail trade are not statistically significant. Simultaneously, the five sectors significantly affect labor force participation, with a probability value of 0.0000 and an R-squared of 0.991788. The findings indicate that the role of economic structure in labor force participation differs across sectors, with agriculture and manufacturing showing significant relationships with labor-market participation in Sumatra.