PERAN INVESTASI MODAL MANUSIA DAN MODAL FISIK DALAM MENINGKATKAN PRODUKTIVITAS TENAGA KERJA DI JAWA TIMUR TAHUN 2010-2024

ABSTRACT Thesis: "The Role of Human Capital and Physical Capital Investment in Increasing Labor Productivity in East Java Province (2010–2024)"; Dhea Andinie, Student ID 22420778, Development Economics Study Program, Faculty of Economics, Universitas Muhammadiyah Ponorogo. Labor productivity is a crucial indicator for supporting a region's economic growth. It is influenced by various factors, including investments in human capital and physical capital. This study aims to analyze the impact of human capital investment—proxied by the Average Years of Schooling (RLS) and Life Expectancy (AHH)—and physical capital investment—proxied by Gross Fixed Capital Formation (PMTB)—on labor productivity in East Java Province during the 2010–2024 period. A quantitative approach was employed using secondary time-series data obtained from Statistics Indonesia (BPS). Data analysis was conducted using Multiple Linear Regression across two models: Model 1, which examines the impact of PMTB and RLS on labor productivity, and Model 2, which examines the impact of PMTB and AHH on labor productivity. The results indicate that in Model 1, the Average Years of Schooling (RLS) variable has a negative but insignificant effect on labor productivity, whereas PMTB has a positive and significant effect. In Model 2, the Life Expectancy (AHH) variable has a negative and significant effect, while PMTB again demonstrates a positive and significant effect on labor productivity. Furthermore, simultaneous test results show that the independent variables in both models collectively have a significant effect on labor productivity in East Java Province. Keywords: Labor Productivity, Human Capital Investment, PMTB, Average Years of Schooling, Life Expectancy.