Analysis of The Effect of Capital and Employee Expenditure on The Expenditure Index Through Labor Absorption in Jambi City

Abstract

The purpose of this study was to determine capital expenditures and personnel expenditures had an effect on expenditures through labor absorption as an entrepreneurial variable in Jambi City in 2001-2021. To achieve the objectives of the study, a path analysis model was used with a qualitative descriptive research method. The conclusions of this study were: 1) Capital expenditure had a positive and insignificant effect on employment in Jambi City. 2) Personnel expenditure had a positive and significant effect on labor absorption in Jambi City. 3) Capital expenditure had a positive and significant effect on the expenditure index in Jambi City. 4) Personnel expenditure had a positive and significant effect on the expenditure index in Jambi City. 5) Labor absorption had a positive and significant effect on the expenditure index in Jambi City. 6) Employment was able to mediate the effect of capital expenditure and personnel expenditure on the Expenditure Index in Jambi Province. For these reasons, the strategy needed is that the government must increase the allocation of capital expenditures and personnel expenditures in its budget, as well as develop employment expansion programs.