Analyzing the Effects of Labor Force Participation, Education, and Minimum Wages on the Human Development Index in Riau Province

Abstract

The Human Development Index (HDI) is used as a measure of development achievement by assessing three main dimensions: health, education, and a decent standard of living. This study aims to analyze the effect of labor force participation (LFPR), education proxied by the average length of schooling (RLS), and the provincial minimum wage (UMP) on the Human Development Index (HDI) in Riau Province for the period 2015–2024. The research method used is a quantitative approach with time series econometric analysis using multiple linear regression. The data used are secondary data obtained from the Central Statistics Agency (BPS) of Riau Province and the Ministry of Manpower. The results of the study indicate that partially LFPR, RLS, and UMP do not have a significant effect on the HDI. However, simultaneously the three variables have a significant effect on the HDI, with a coefficient of determination (R²) of 0.9828, meaning that 98.28% of the variation in the HDI can be explained by the three independent variables. Classical assumption tests indicate that the regression model meets the assumptions of normality and homoscedasticity, but faces serious multicollinearity issues between the RLS and the Provincial Minimum Wage (UMP), as well as indications of positive autocorrelation. These findings confirm that human development in Riau is more influenced by a combination of factors than by a single factor. Therefore, policies to improve education quality, expand productive employment opportunities, and establish a proportional minimum wage need to be implemented in an integrated manner to encourage sustainable HDI growth.