Abstract

This study aims to analyze the effect of inflation, domestic investment, and provincial minimum wage on formal sector employment absorption during the period 2010–2024. The study employs a quantitative approach using the multiple linear regression method. The research uses time series secondary data obtained from the Central Bureau of Statistics and related institutions.The results show that, partially, the inflation and domestic investment have a negative and insignificant effect on formal sector employment absorption, while the provincial minimum wage has a positive and significant effect. Simultaneously, the three variables have a jointly significant effect on formal sector employment absorption. These findings indicate that wage policy, inflation stability, and the direction of domestic investment play an important role in supporting employment growth in the formal sector.

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