Impact of Wetland Conversion and Industrialization to Labor Transformation in Java

Abstract

Java is the biggest rice supplier with the largest wetland compared to other islands in Indonesia. However as the most of non-agricultural activities occur in Java, Java suffered from largest wetland conversion. The aims of the reseach were analyzing the wetland conversion in Java spatially, comparing the wetland conversion rate and rice productivity, economic and population growth as well as viewing the influence of wetland conversion rate, industrialization and other factors to the rate of labor transformation from agricultural to industrial sector. Result of spatial analizing using Arc View showed largest wetland conversion from 1986 to 2010 occured in biggest cities and composing economic regions. From the linear trends of wetland availability and rice production, the rice production still increased annually although the availability of wetland decreased. In every region there is disparity of relative productivity between industry and agricultural sector. From 2000 to 2010, some disparities are convergent and some other are divergent due to fluctuation of share of GDP and amount of labor. The econometric result using Eviews 7 in estimating panel data from 2001 to 2010 to predict the effect of GDP and population showed that GDP and population significantly effect on wetland availability. In predicting some factor that influence the labor transformation, the multiple regression model showed only education index that significantly effect the labor transformation from agricultural to industry sector. Other factors such as rate of wetland conversion, disparity of relative productivity between agricultural and industry sector do not significantly cause the shift of labor from agricultural to industrial sector. Tipology of labor based industry presented the biggest addition to transformation rate compare to capital based and natural resources based industries.