Applying Robust Spatial Autoregressive Model to Analyze the Determinants of Open Unemployment in West Java

Abstract

Open unemployment is a critical macroeconomic challenge in developing regions like West Java, Indonesia, where spatial disparities and data anomalies complicate traditional analysis. This study addresses these limitations by employing a Robust Spatial Autoregressive (RSAR) model with M-Estimator, integrating spatial dependence and outlier resilience to enhance estimation accuracy. Using 2024 district-level data from Indonesia’s Central Bureau of Statistics (BPS) and Open Data Jabar, the research examines determinants such as labor force participation, education, and regional GDP. The methodology begins with Ordinary Least Squares (OLS) to identify initial predictors, followed by spatial diagnostics (Moran’s I, Lagrange Multiplier tests) to confirm spatial autocorrelation. A customized Queen contiguity weight matrix captures neighborhood effects, while robust M-Estimation mitigates outlier distortions. Results reveal that the RSAR model achieves superior explanatory power (R² = 0.8626) compared to OLS and standard Spatial Autoregressive (SAR) models, with labor force participation (X₄) emerging as a significant negative predictor of unemployment. Spatial effects (ρ = 0.337) though modest, underscore the importance of inter-regional dynamics. The study concludes that RSAR offers a more reliable framework for regional labor analysis, combining spatial rigor with robustness against data irregularities. Policy-wise, the findings advocate targeted interventions to boost labor participation and address localized disparities, emphasizing the need for spatially informed, outlier-resistant methodologies in economic planning.