The Analysis of the impact of financial performance on unemployment through economic growth as an intervening variable in Jambi City 2004-2024

Abstract

This study aims to analyze the influence of local government financial performance, measured based on independence, effectiveness, and efficiency ratios, on unemployment in Jambi City through economic growth. The research method uses secondary data in Jambi City for the period 2004 – 2024, and the analytical tool used in this study is path analysis. The results indicate that the efficiency ratio is the most dominant variable in determining changes in the unemployment rate in Jambi City, with a total effect of 45.8 percent. The independence ratio also provides a positive contribution of 18.3 percent. Meanwhile, economic growth has a total effect of 5.1 percent, indicating a relatively small but still significant contribution in reducing unemployment through increased production and investment activities. Conversely, the effectiveness ratio actually has a total negative effect of -7.4 percent, which indicates that although regional revenue realization is high, this effectiveness has not yet been fully translated into development policies that impact job absorption