Identifying Factors Influencing Urbanization in Denpasar City

Gde Indra Surya Diputra; I Made Risma M. Arsha

doi:10.29259/jep.v21i1.19749

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December 13, 2022

Accepted

July 3, 2023

Published

July 8, 2023

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Abstract

Urbanization has both positive and negative impacts on an area. This study aims to analyze the relationship between GRDP, district minimum wages, and labor participation with urbanization in Denpasar City. The research method used is multiple linear regression analysis using GRDP data, district minimum wages and labor participation in 2010 - 2020 and processed with SPSS version 25.0 with a determined significance level of 95% (p <0.05). The results of the study show that the Gross Regional Domestic Product (GRDP), district minimum wages and labor participation affect urbanization partially and simultaneously with probability (p<0.05). Testing the level of correlation with the Adjusted R Square of 0.999 (99.9%) gross regional domestic product (GRDP), district minimum wages and labor participation have a very strong influence on urbanization in Denpasar City. Socio-economic disparities, inadequate infrastructure, low industrialization, low job availability, low wages, and inadequate social networks increase the desire for urbanization. The practical implication of this research is to increase economic growth and equity in controlled urbanization areas as a solution to accelerating economic development.

Keywords

urbanization economic development gap alleviation spatial analysis.

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Author Biography

Gde Indra Surya Diputra, Faculty of Business Economics and Tourism, Hindu University of Indonesia, Denpasar

Faculty of Business Economics and Tourism, Hindu University of Indonesia

How to Cite

Diputra, G. I. S., & Arsha, I. M. R. M. (2023). Identifying Factors Influencing Urbanization in Denpasar City. Jurnal Ekonomi Pembangunan, 21(1), 87–98. https://doi.org/10.29259/jep.v21i1.19749

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References

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Hong, T., Yu, N., Mao, Z., & Zhang, S. (2021). Government-driven urbanization and its impact on regional economic growth in China. Cities, 117, 103299. https://doi.org/10.1016/j.cities.2021.103299
Hopenhayn, H., Neira, J., & Singhania, R. (2022). From population growth to firm demographics: Implications for concentration, entrepreneurship and the labor share. Econometrica, 90(4), 1879–1914.
Huang, G., Xing, Z., Wei, C., & Xue, D. (2022). The driving effect of informal economies on urbanization in China. Journal of Geographical Sciences, 32(5), 785–805. https://doi.org/10.1007/s11442-022-1972-y
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References

Adnyana, I. M. D. M. (2021). Populasi dan Sampel. In Metode Penelitian Pendekatan Kuantitatif (1st ed., pp. 103–116). CV. Media Sains Indonesia.

Anita, D., & Sentosa, S. U. (2021). Analysis of Determinants of Village-City Migration and Economic Growth Between Provinces in Indonesia. Proceedings of the Sixth Padang International Conference On Economics Education, Economics, Business and Management, Accounting and Entrepreneurship (PICEEBA 2020), 169–175. https://doi.org/10.2991/aebmr.k.210616.025

Atack, J., Margo, R. A., & Rhode, P. W. (2022). Industrialization and urbanization in nineteenth century America. Regional Science and Urban Economics, 94, 103678. https://doi.org/10.1016/j.regsciurbeco.2021.103678

BPS Bali. (2021). Population Characteristics by Regency/City in Bali Result of 2020 Population Census. https://bali.bps.go.id/statictable/2021/04/12/173/beberapa-karakteristik-penduduk-provinsi-bali-menurut-kabupaten-kota-hasil-sensus-penduduk-2020.html

Busso, M., Chauvin, J. P., & Herrera L., N. (2021). Rural?urban migration at high urbanization levels. Regional Science and Urban Economics, 91, 103658. https://doi.org/10.1016/j.regsciurbeco.2021.103658

Cai, Z., Liu, Q., & Cao, S. (2020). Real estate supports rapid development of China’s urbanization. Land Use Policy, 95, 104582. https://doi.org/https://doi.org/10.1016/j.landusepol.2020.104582

Chen, M., Huang, X., Cheng, J., Tang, Z., & Huang, G. (2023). Urbanization and vulnerable employment: Empirical evidence from 163 countries in 1991–2019. Cities, 135, 104208. https://doi.org/10.1016/j.cities.2023.104208

Chen, M., Sui, Y., Liu, W., Liu, H., & Huang, Y. (2019). Urbanization patterns and poverty reduction: A new perspective to explore the countries along the Belt and Road. Habitat International, 84, 1–14. https://doi.org/10.1016/j.habitatint.2018.12.001

Chen, Z., & Paudel, K. P. (2021). Economic openness, government efficiency, and urbanization. Review of Development Economics, 25(3), 1351–1372. https://doi.org/10.1111/rode.12766

Dadi, W., Mulegeta, M., & Simie, N. (2022). Urbanization and its effects on income diversification of farming households in Adama district, Ethiopia. Cogent Economics & Finance, 10(1), 2149447. https://doi.org/10.1080/23322039.2022.2149447

Darwin, M., Mamondol, M. R., Sormin, S. A., Nurhayati, Y., Tambunan, H., Sylvia, D., Adnyana, I. M. D. M., Prasetiyo, B., Vianitati, P., & Gebang, A. A. (2021). Quantitative approach research method (T. S. Tambunan, Ed.; 1st ed.). CV Media Sains Indonesia.

Dewi, Y. S. (2017). Arus Urbanisasi Dan Smart City. Prosedding Seminar Nasional Inovasi Teknologi.

Dustmann, C., Lindner, A., Schönberg, U., Umkehrer, M., & vom Berge, P. (2022). Reallocation Effects of the Minimum Wage*. The Quarterly Journal of Economics, 137(1), 267–328. https://doi.org/10.1093/qje/qjab028

Dustmann, C., Lindner, A., Schönberg, U., Umkehrer, M., & Vom Berge, P. (2022). Reallocation Effects of the Minimum Wage. The Quarterly Journal of Economics, 137(1), 267–328. https://doi.org/10.1093/qje/qjab028

Engbom, N., & Moser, C. (2021). Earnings Inequality and the Minimum Wage: Evidence from Brazil. SSRN Electronic Journal, 1–63. https://doi.org/10.2139/ssrn.3851834

Engbom, N., & Moser, C. (2022a). Earnings inequality and the minimum wage: Evidence from Brazil. American Economic Review, 112(12), 3803–3847. https://doi.org/10.2139/ssrn.3851834

Engbom, N., & Moser, C. (2022b). Earnings inequality and the minimum wage: Evidence from Brazil. American Economic Review, 112(12), 3803–3847.

Faharuddin, F., & Endrawati, D. (2022). Determinants of working poverty in Indonesia. Journal of Economics and Development, 24(3), 230–246. https://doi.org/10.1108/JED-09-2021-0151

Fedorets, A., & Shupe, C. (2021). Great expectations: Reservation wages and minimum wage reform. Journal of Economic Behavior & Organization, 183, 397–419. https://doi.org/https://doi.org/10.1016/j.jebo.2021.01.006

Galenson, W. (2022). Labor in developing economies. Univ of California Press.

Gibson, J., Jiang, Y., & Susantono, B. (2023). Revisiting the role of secondary towns: How different types of urban growth relate to poverty in Indonesia. World Development, 169, 106281. https://doi.org/10.1016/j.worlddev.2023.106281

Ginting, E. S., Hutasoit, A. H., & Peranginangin, N. (2021). North Sumatra Economic Growth Analysis. Jurnal Mantik, 5(1), 184–190.

Grigoli, F., Koczan, Z., & Topalova, P. (2018). Drivers of Labor Force Participation in Advanced Economies: Macro and Micro Evidence. International Monetary Fund WP/18/150, 18, 40. https://doi.org/10.5089/9781484361528.001

Gross, J., & Ouyang, Y. (2021). Types of urbanization and economic growth. International Journal of Urban Sciences, 25(1), 71–85. https://doi.org/10.1080/12265934.2020.1759447

Guo, J., Yu, Z., Ma, Z., Xu, D., & Cao, S. (2022). What factors have driven urbanization in China? Environment, Development and Sustainability, 24(5), 6508–6526. https://doi.org/10.1007/s10668-021-01714-4

Ha, N. M., Dang Le, N., & Trung-Kien, P. (2021). The impact of urbanization on poverty reduction: An evidence from Vietnam. Cogent Economics & Finance, 9(1), 1918838. https://doi.org/10.1080/23322039.2021.1918838

Hakim, A. R., Nachrowi, N. D., Handayani, D., & Wisana, I. D. G. K. (2022). Do Amenities and Economic Factors Affect Migration? Empirical Evidence from Indonesian Cities. Environment and Urbanization ASIA, 13(1), 11–26. https://doi.org/10.1177/09754253221083169

Hong Diep, N. T., Nguyen, C. T., Diem, P. K., Hoang, N. X., & Kafy, A.- Al. (2022). Assessment on controlling factors of urbanization possibility in a newly developing city of the Vietnamese Mekong delta using logistic regression analysis. Physics and Chemistry of the Earth, Parts A/B/C, 126, 103065. https://doi.org/10.1016/j.pce.2021.103065

Hong, T., Yu, N., Mao, Z., & Zhang, S. (2021). Government-driven urbanization and its impact on regional economic growth in China. Cities, 117, 103299. https://doi.org/10.1016/j.cities.2021.103299

Hopenhayn, H., Neira, J., & Singhania, R. (2022). From population growth to firm demographics: Implications for concentration, entrepreneurship and the labor share. Econometrica, 90(4), 1879–1914.

Huang, G., Xing, Z., Wei, C., & Xue, D. (2022). The driving effect of informal economies on urbanization in China. Journal of Geographical Sciences, 32(5), 785–805. https://doi.org/10.1007/s11442-022-1972-y

Jardim, E., Long, M. C., Plotnick, R., Van Inwegen, E., Vigdor, J., & Wething, H. (2022). Minimum-wage increases and low-wage employment: Evidence from Seattle. American Economic Journal: Economic Policy, 14(2), 263–314.

Karimah, A. & Susanti, H. (2022). Gender Inequality in Education and Regional Economic Growth in Indonesia. Jurnal Ekonomi Pembangunan, 20(1), 1-14. DOI: 10.29259/jep.v20i1.17841

Kurniawan A., E., Awaluddin, M., Fitriadi, F., Busari, A., & Darma, D. C. (2021). Contemporary Indonesian GDP: Context of Analysis at Unemployment, Labor Force and Poor People. International Journal of Economics and Financial Research, 74, 143–154. https://doi.org/10.32861/ijefr.74.143.154

Li, L., Zhao, K., Wang, X., Zhao, S., Liu, X., & Li, W. (2022). Spatio-Temporal Evolution and Driving Mechanism of Urbanization in Small Cities: Case Study from Guangxi. Land, 11(3), 415. https://doi.org/10.3390/land11030415

Lin, L., & Zhu, Y. (2022). Types and determinants of migrants’ settlement intention in China’s new phase of urbanization: A multidimensional perspective. Cities, 124, 103622. https://doi.org/10.1016/j.cities.2022.103622

Ma, H. (2022). Urbanization under globalization: How does the Belt and Road Initiative affect urbanization levels in participating countries. Journal of Geographical Sciences, 32(11), 2170–2188. https://doi.org/10.1007/s11442-022-2042-1

Mitra, A. (2019). Women’s Work in Response to Urbanization: Evidence from Odisha. ANTYAJAA: Indian Journal of Women and Social Change, 4(1), 92–106. https://doi.org/10.1177/2455632719836804

Petrovici, N., Poenaru, F., & Mare, C. (2023). “Exploded urbanism”: Processes of peri-urban formation in Romania. Cities, 135, 104218. https://doi.org/10.1016/j.cities.2023.104218

Pilipiec, P., Groot, W., & Pavlova, M. (2021). The Effect of an Increase of the Retirement Age on the Health, Well-Being, and Labor Force Participation of Older Workers: A Systematic Literature Review. Journal of Population Aging, 14(2), 271–315. https://doi.org/10.1007/s12062-020-09280-9

Ramadhan, N., Lestari, V. N. S., Sukman, J. S., & Handini, S. (2023). The influence of gross regional domestic product, the population, and the number of people working to income inequality in east java province. Jurnal Ilmiah Akuntansi Dan Keuangan, 2(1), 1–16. https://doi.org/10.24034/jiaku.v2i1.5709

Sato, T., & Shiraishi, M. (2020). Time-series economic effect of developing MAGLEV among metropolitan areas in Japan considering urbanization economies. Transportation Research Procedia, 48, 150–167. https://doi.org/10.1016/j.trpro.2020.08.013

Siregar, R. T., Silitonga, H. P., Lubis, K., & Sudirman, A. (2020). The Impact of GRDP and RWP on Regional Minimum Wage. Jejak: Journal of Economics and Policy, 13(2), 292–306. https://doi.org/10.15294/jejak.v13i2.23398

Suffina, L., & Suharto, R. B. (2022). Factors influencing urbanization in Samarinda. KINERJA: Jurnal Ekonomi Dan Manajemen, 19(1), 37–44. https://doi.org/10.29264/jkin.v19i1.10855

Suhartini, N., & Jones, P. (2023). Urbanization and the Development of the Kampung in Indonesia. In The Urban Book Series (pp. 57–77). Springer. https://doi.org/10.1007/978-3-031-22239-9_4

Taresh, A., Sari, D., & Purwono, R. (2021). Analysis of the relationship between income inequality and social variables: Evidence from Indonesia. Economics & Sociology, 14(1), 103–119. https://doi.org/10.14254/2071-789X.2021/14-1/7

Thaddeus, K. J., Bih, D., Nebong, N. M., Ngong, C. A., Mongo, E. A., Akume, A. D., & Onwumere, J. U. J. (2022). Female labor force participation rate and economic growth in sub-Saharan Africa: “a liability or an asset.” Journal of Business and Socioeconomic Development, 2(1), 34–48. https://doi.org/10.1108/JBSED-09-2021-0118

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Identifying Factors Influencing Urbanization in Denpasar City

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Gde Indra Surya Diputra, Faculty of Business Economics and Tourism, Hindu University of Indonesia, Denpasar

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