Analysis of Migration Determinants in Java Island: A Panel Data Analysis

Abstract

Migration as in internal or international is a very important poin to consider in regional
development planning due to its strong connection to government attempts in improving
welfare distribution among its people. This study aimed to analyze the effect of Regional
Minimum Wages (UMP), Gross Regional Domestic Product (GRDP), investment, and
government spending on in- migration to provinces in Java Island. This study utilized a
panel data regression model from 1995 – 2015 in six provinces in Java Island using Fixed
Effect Model (FEM). The data was obtained from Statistic Indonesia and Indonesian
Investment Coordinating Board. The results showed that the Regional Minimum Wage
(UMP) and investment had a positive impact on in-migration, while GDRP was proven to
have a negative impact. On the other hand, government expenditure sis not have any effect
on in-migration.To cope with the high rate of population movement or migration, the
government should take policies such as allocating and increasing investment outside of
large, densely populated cities and industries in order to support economic growth and
increase production capacity which will increase wages, thereby reducing population
movement or migration to big cities.