The Aim of Economic development is to improve peoples welfare and living

standards. The high of population growth in Central Java, especially the increasing of
labor force, gave a consequence to the need for the availability of jobs. The imbalance
between the work force and demand for labour will cause the unemployment problem.
The Job creation and economic sector's ability to absorb the labor force should be
improved.
This study aims to assess the employment in Central Java, especially the leading
sectors in absorbing labor force and the factors that may influence, 2009-2014. This
Study Uses shift share analysis, Loqation Quotient (LQ), Model Rasio Pertumbuhan
(MRP), overlay and panel data regression. The Variables used in this study are the GDP,
government spending, investment, Regional Minimum Wage (UMR) and inflation.
The results of Shift share analysis, Loqation Quotient (LQ), Model Rasio
Pertumbuhan (MRP) and overlay show that the manufacturing sector is the leading
sectors in absorbing labor force in the province of Central Java. The Other Sectors such
as Agriculture, construction, trade, hotels and restaurants and the financial sector, leasing
and business services are the potential sectors to absorb labor force. While the calculation
with panel data regression analysis, that use Fixed Effect Method with Generalized Least
Square-Cross Section Weights and then do White Cross-Section, All Variables
simultaneously have significance influence to Labor Force Absorption in the province of
Central Java during the period 2009-2014. Partially testing shows that GDP, government
spending, investment and UMR have positive and significant influence on Labor Force
Absorption, while inflation has negative and significant influence.
Keywords: Labor Absorption, Shift Share, LQ, MRP, Overlay, the GDP, government
spending, investment, Regional Minimum Wage (UMR), inflation.