Analysis of the Effects of Formal-Informal Employment Status, Human Capital, and Spatial Factors on Worker Welfare in North Maluku Province

Maria Theresa Gusti Ayu Adventa Brilianti (Universitas Mataram, Indonesia)
Luluk Fadliyanti (Universitas Mataram, Indonesia)
Vici Handalusia Husni (Universitas Mataram, Indonesia)

JURNAL ECONOMINA
Vol. 5 No. 10 (2026): JURNAL ECONOMINA, Oktober 2026

Rapid macroeconomic expansion in North Maluku Province fails to automatically translate into equitable welfare outcomes across the workforce, primarily due to persistent structural dualism in the labor market. This study investigates the impact of employment status (formal vs. informal), human capital accumulation, and spatial-sectoral characteristics on worker earnings, as a material proxy for economic welfare, within the framework of Sustainable Development Goal 8 (Decent Work and Economic Growth). Utilizing microdata from the National Labor Force Survey (SAKERNAS), we estimate an extended Mincerian wage equation. Empirical results reveal a pronounced formal wage premium, whereas informal workers remain encumbered by an informality trap, incurring a substantial wage penalty. Human capital enhancements significantly boost earnings, with standardized vocational training generating superior wage returns compared to merely extending formal schooling duration. Age and work experience exhibit a non-linear, concave parabolic relationship with earnings, reaching a productivity peak at 43.76 years before experiencing age-related depreciation. Furthermore, the analysis confirms a distinct urban wage premium alongside marked sectoral heterogeneity. Relative to the reference baseline of Food Crop Agriculture, the Services, Industry, and Non-Agricultural sector records the highest wage premium (110.03%), followed by Non-Food Crop Agriculture (90.16%) and Fisheries (38.10%), whereas Livestock Farming demonstrates no statistically significant difference due to shared subsistence-level constraints. This study concludes that welfare inequality in North Maluku stems predominantly from structural rigidities inherent in a dualistic labor market rather than individual capacity differentials alone. Policy interventions must prioritize targeted labor formalization initiatives (SDG Target 8.3) and industry-aligned vocational training (SDG Target 8.5) to ensure decent work and equitable compensation across regional labor markets.