Probit Regression On Panel Data (Case Study On Open

Unemployment Rate in Indonesia)

Rizfanni Cahya Putri1, Vita Ratnasari2, and I Nyoman Latra3

1,2,3
Department of Statistics, Institut Teknologi Sepuluh Nopember,
Indonesia.

rizfanni.cahya.putri15@mhs.statistika.its.ac.id, vitaratna70@gmail.com,
i_nyoman_l@statistika.its.ac.id

Abstract. Problems about Open Unemployment Rate in Indonesia need to be examined to

determine the factors that influence from year to year in accordance with the achievement of the
government's target. There is one method that can be used to determine the probability of the
influence of Open Unemployment Rate in Indonesia. The researcher used a panel data probit
method where the response variable is differentiated into two categories, which are category 0,
which is the province that has the percentage of Open Unemployment Rate less than equal to the
government's target, which is 4 percent, and category 1 is the province that has the percentage
of Open Unemployment rate more than to the government's target, which is 4 percent. The first
stage which was conducted on the probit regression to the panel data is estimating the parameters,
where the parameter estimation method used is Maximum Likelihood Estimation (MLE) using
Newton-Raphson optimization technique. The second stage is the simultaneous and partial
testing with Random Effects Model (REM) approach, the selection of the best models used AIC
(Akaike's Information Criterion) criteria, calculating accuracy of classification and marginal
effect. The data used in this research is secondary data, in the form of periodic series data (time
series) in the period 2006 to 2014. The data were obtained from the annual periodic reports from
Badan Pusat Statistik (BPS). Variables used are the Growth Rate of GDP, Growth Rate of
Population, Minimum Provincial Hage, Literacy Rate and Gross Enrollment Rate. Probit
modeling on the panel data for Random Effects Model (REM) for model one and two on a case
study of Open Unemployment Rate in Indonesia gives the conclusion that Growth Rate of GDP,
Provincial Minimum Wage, Literacy Rate and Gross Enrollment Rate together produce predictor
variables that significantly influential. The selection of the best criterion which has the smallest
AIC value is on the Random Effect Model (REM) model two. The accuracy of classification that
has the largest classification accuracy is the Random Effect Model (REM) approach amounted
to 66.67 percent.

Keywords : Accuracy of Classification, AIC (Akaike's Information Criterion), Open

Unemployment Rate, Random Effects Model (REM)

1. Introduction
Employment is an important aspect to be discussed because it is one indicator of economic development.
Good employment conditions play a role in promoting the economic growth. According to the Ministry
of Women Empowerment and Child Protection, employment issues are still an obstacle in Indonesia,
including high levels of unemployment, low quality of labor, underage workers and others.
Unemployment in Indonesia is ranked 60th out of 203 countries in the world with a percentage of Open
Unemployment Rate is 6.18 percent [1]. In a period of ten years (2006-2015), Indonesia's percentage of
Unemployment Rate dropped annually which is 10.28; 9.11; 8.39; 7,87; 7.14; 7.48; 6.13; 6.17; 5.94 and
6.18 percent [2]. However, the figure is still higher than the national standard, which is 4.0 percent, so
that there should be a decrease in the unemployment rate [3]. It is in accordance with the Indonesian
government's objectives that the proportion or number of unemployed from the labor force is useful as
a reference for the government to open the new jobs. In addition, the trend of this indicator will indicate
the success of the employment program from year to year.
Therefore, the problem of Open Unemployment Rate in Indonesia needs to be examined to determine
the factors that influence from year to year in accordance with the achievement of the government's
target. There is one method that can be used to determine the probability of influence of the Open
Unemployment Rate in Indonesia. The researcher used a panel data probit method where the response
variable is differentiated into two categories, which are category 1, which is the province that has the
percentage of Open Unemployment Rate more than to the government's target, which is 4 percent, and
category 0, which is the province that has the percentage of Unemployment rate less than equal to the
government's target, which is 4 percent.
The previous research related to the Open Unemployment Rate in Indonesia was condusted by [4]
analyzing analysis of 2SLS affecting the level of unemployment where variable of productivity,
economic growth, investment, government spending, and wages influence the unemployment rate in
Indonesia significantly. According to [5] using regression panel model is conducted by estimating FEM
cross section weight. Of the five variables analyzed, there are three variables that significantly influence
the Open Unemployment Rate, which are The Rate of Population Growth, Literacy Rate and Gross
Participation Number of Senior High School/ equivalent.
Based on the explanation, [6] states that there are three types of link, which can be used to analyze the
binomial-distributed response variable. The assumptions that must be met for the link function that the
response variable is binomial distributed, i.e. the p-value is within the interval [0,1] so that which has
the value of is a logit function, probit and complementary log-log. A simulation study for logit and
probit has been conducted by [7] who explains that logit is better used for the number of large sample
that is more than equal to 500 samples, while probit is better used for small sample quantities of less
than equal to 200 samples. Therefore, this study used probit because it has a small samples, which are
33 provinces in Indonesia.
Panel data is a combination of cross section data and time series data, so of the course it will have more
observation than the cross section data or time series only. As a result, when combined into a pooled the
data, in order to make the regression, the results tend to be better than using only regression cross section
data or time series only. If the researchers only use cross section data which is observed only at a time
(e.g. one year), the researcher can not see how the condition of Open Unemployment Rate in Indonesia
from time to time in a given period. In fact, it is very likely that the condition between a year to other
year will be different. By using a panel data, the researcher could see the fluctuation of Open
Unemployment Rate in Indonesia for a time period and condition difference of Open Unemployment
Rate for 33 provinces in Indonesia at a time [8].
There are three approaches on the panel data, namely Common Effect Model (CEM), Fixed Effects
Model (FEM) and Random Effects Model (REM). [9] explains that the approach of Common Effect
Model (CEM) states that all data is aggregated without regard to individuals and time. [8] explains that
the Fixed Effect Model (FEM) approach for probit model does not produce consistent estimator on the
parameters so that the estimate is biased. [10] suggests that the Random Effect Model (REM) approach
stressed the limitation that the correlation between the error to the same individual is constant and
assumes homoscedasticity in the variance unit, so that the researcher only used Random Effects Model
(REM) approach.
The previous research on panel data probit has been done by [11] using panel probit on the average
number of children born alive in East Java province produces a classification accuracy of 70.6 percent
and [12] using panel probit on food security in Indonesia resulted in the classification accuracy
amounting to 75.15 percent.
The first step being taken on a probit regression for panel data is estimating the parameters, where the
parameter estimation method used is the Maximum Likelihood Estimation (MLE) by using Newton-
Raphson optimization techniques. The second stage is the simultaneous and partial testing with Random
Effects Model (REM) approach, the selection of the best models uses AIC (Akaike's Information
Criterion) criteria then calculating the accuracy of the classification and marginal effect.
The description above is the basis for the researcher to conduct research on the Open Unemployment
Rate in Indonesia from 2006 until 2015 with the predictor variables that allegedly influence, by using
the approach of Random Effects Model (REM) in panel data probit regression.

2. Literature Review
2.1 Probit Regression On Panel Data with Random Effect Model (REM) Approach
REM has the assumption that homoscedasticity in the unit variance [13]. REM Model emphasizes that
the restrictions on the correlation between the error to the same individual is constant, the model REM
was first used by [14]. REM model is as follows.
y*it =βxit +εit with  it  vit  ui (3)
where, i=1,2,...,n and t=1,2,...,Ti .
Threshold  , it can be written as follows.
1 jika y*it  
yit  
0 jika y it  
*

2.2 Parameter Testing of Probit Regression On Panel Data

According to [15] parameter testing is done to test the significance of the effect of predictor variables
on the response variable in the model. Here is a simultaneously and partially parameter testing.
2.2.1 Simultaneous Test
Simultaneous test is used to test the effect of the overall coefficient in the model or to test the parameters
altogether. Here is a hypothesis and its statistical test.
H0 : 1  2  ...  k  0
H1 : minimal ada satu q  0  q  1, 2,..., k 
Statistical test uses likelihood ratio  G 2  as follows.
 L   
G 2  2 ln  
 
L  
 
(4)

The statistical test follows the chi-square   2  distribution with k degrees of freedom (the number of
predictor variables), so it will reject H 0 if the value of G 2 >  2 or p-value <  which means that the
predictor variables jointly affect the response variable.
2.2.2 Partial Test
Partial test is used to test the significance of each parameter or to find out whether a significant effect
for the predictor variables included in the model or not. Here is the hypothesis and its statistical test.
H0 : q  0
H1 : q  0, q  1, 2,..., k
Statistical test uses Wald test (W) as follows.
ˆ q
W (5)
SE ˆ q 

̂q is an estimator from q and SE ˆ q  is an estimator of the standard error q , the value of Wald test
 
follows the  distribution with the degrees of freedom 1. Reject H 0 if | Whitung |2(1; ) or p-value> 
2

so that the predictor variables affect the response variable.

2.3 The Criteria of Best Model Selection

Criteria for selecting the best model for the function of Maximum Likelihood Estimation (MLE) which
serve to explain the relationship between these factors on the response variable is the method of Akaike's
Information Criterion (AIC). Akaike's Information Criterion (AIC) began when Akaike (1973) in [17]
proposed criteria for information contained in the statistical model, in which the selection of best model
criterion based on AIC is done by choosing the model with the smallest AIC value. This is because the
value of AIC is proportional to the value of deviancy models, the smaller the value of deviancy the less
the level of errors generated by the model. In other words, the more precise the model obtained.
AIC = -2ln  L   2q (6)
where,
ln  L  = maximum likelihood
q = number of parameter will be eliminated

2.4 Accuracy of Classification

Classification procedure is an evaluation to see opportunities of classification error made by a
classification function by using the size of Apparent Error Rate (APER), i.e. the values of sample
proportions which are wrong or not appropriately classified by the classification function [17].

Table 1. Accuracy of Classification

Observation Prediction Result
Total
Result Y1 Y2
Y1 n11 n12 n1+
Y2 n21 n22 n2+
Total n+1 n+2 n++

APER value is obtained by this equation.

n12  n 21
APER  %   (7)
n11  n12  n 21  n 22

with, accuracy of classification by this equation,

 
(8)
1 APER or 100%  APER*100%

2.5 Marginal Effect

Marginal effect used to interpretation probit regression model [16] with used equation (9) and then get
marginal effect for influence predictor variable xit with i=1,2,...,n and t=1,2,...,Ti to success
probability,
P  Y  0  
  1  β T xit  (9)

xi xi
 
 β  1  β T xit 

3. Research Method
3.1 Data Resource
The data used in this research is secondary data, in the form of a regular series data (time series) in the
period of 2006 to 2014. The data were obtained from the annual periodic reports from Badan Pusat
Statistik (BPS).

3.2 Research Variable

Research variables used in this study is the dependent variable (Y) which is the Open Unemployment
Rate in 33 provinces in Indonesia with the period of 2006 to 2014. Based on the data and information
obtained, then in this study independent or predictor variables (X) which was thought to affect Y were
taken in accordance with the existing references in the conceptual framework are as follows.

Table 2. Research Variable

Research Variable Type of Variable Scale
Open Unemployment Rate ≤ Government Target = 0
Y Category
Open Unemployment Rate > Government Target = 1
X1 The growth rate of Gross Domestic Product (GDP) Ratio
X2 The growth rate of Population Ratio
X3 Provincial Minimum Wage Ratio
X4 Literacy Rate Ratio
X5 Gross Enrollment Rate Ratio

4. Analysis and Discussion

4.1 Modeling of Probit regression On Panel Data for Model One
Probit regression on panel data modeling was done namely Random Effects Model (REM) by this
equation,
y*it  0  1x1i,t  2 x 2i,t  3 x3i,t  4 x 4i,t  5 x5i,t  it

4.2 Parameter Estimation of Probit regression On Panel Data for Model One
Parameter estimation probit regression on panel data modeling was done namely Random Effects Model
(REM) by this equation,
ŷ*it  8.875426  0.0640043x1i,t  0.0043435x 2i,t  1.395575x3i,t  0.1882437x4i,t  0.10852x5i,t
Here is the simultaneous parameter testing for Common Effect Model (CEM) and Random Effects
Model (REM).
Hypothesis
H0 : 1  2  ...  5  0
H1 : at least there is one p  0, p  1, 2,3, 4,5
Statistical test
G 2  2ln  L(
L( )  ˆ
 ˆ ) 
 Table 3. Simultaneous Parameter Significance Testing
Measurement REM
Likelihood Ratio Test (G2) 115.55
P-Value 0.000
2(5;0,10) 9.236

Table 3 illustrates that the simultaneous testing on a Random effect Model (REM), there is obtained a
decision to reject H0, which means the 90 percent of confidence level, at least there has been one
significant parameters in the model, or at least there is one of four predictor variables used has a
significant influence on the Open Unemployment rate in Indonesia. The next is doing a partial test by
the Wald test, in which by using  = 0.10, it is obtained the test results as follows for the Random
Effects Model (REM).
Hypothesis
H0 : q  0
H1 : q  0, q  1, 2,3, 4,5
Statistical test uses Wald Test (W) as follows
ˆ q
W
SE ˆ q 

Table 4. Partial Testing of Parameter Significance Random Effect Model (REM) for Model One
Variable Coefficient Standard Error Wald P-Value Decision
Constants -8.875426 2.826825 -3.14 0.002 Reject H0
X1 -0.0640043 0.0341516 -1.87 0.061 Reject H0
X2 -0.0043435 0.1280856 -0.03 0.973 Failed to Reject H0
X3 -1.395575 0.228173 -6.12 0.000 Reject H0
X4 0.1882437 0.0370685 5.08 0.000 Reject H0
X5 -0.10852 0.0222208 -4.88 0.000 Reject H0
ρ 0.9063091

Table 4 explains that of the five predictor variables there are three significant variables where p-value <
 = 0.05 where significant predictor variables are the growth rate of GDP, Provincial Minimum Wage
and Literacy Rate. Then the following is the equation on panel data probit regression with the Random
Effect Model (REM) approach for Model One.
ŷ*it  8.875426  0.0640043x1i,t  0.0043435x 2i,t  1.395575 x3i,t  0.1882437 x 4i,t  0.010852x5i,t
  0.9063091
And the probability function is as follows.
P    8.875426  0.0640043X1i,t  1.395575 X 3i,t  0.1882437 X 4i,t  0.010852X 5i,t 
Thus, suppose a province in year-t which has the Open Unemployment Rate has met the government's
target with the growth rate of GDP 1.56 percent, minimum provincial wage of 820,000 Rupiahs and a
literacy rate of 94.27 percent has probability amounted to 0.9122834. As for a province that has Open
Unemployment Rate which do not meet the government's target with the growth rate of GDP 1.56
percent, minimum provincial wage of 820,000 Rupiahs and a literacy rate of 94.27 percent has
probability of 0.087166.
4.1 Modeling of Probit regression On Panel Data for Model One
Probit regression on panel data modeling was done namely Random Effects Model (REM) by this
equation,
y*it  0  1x1i,t  2 x 2i,t  3 x3i,t  4 x 4i,t  5 x5i,t  it

4.1.1 Parameter Estimation of Probit regression On Panel Data for Model One
Parameter estimation probit regression on panel data modeling was done namely Random Effects Model
(REM) by this equation,
ŷ*it  8.875426  0.0640043x1i,t  0.0043435x 2i,t  1.395575x3i,t  0.1882437x4i,t  0.10852x5i,t
Here is the simultaneous parameter testing for Common Effect Model (CEM) and Random Effects
Model (REM).
Hypothesis
H0 : 1  2  ...  5  0
H1 : at least there is one p  0, p  1, 2,3, 4,5
Statistical test

G 2  2ln  L(
L( )  ˆ
 ˆ ) 
Table 3. Simultaneous Parameter Significance Testing
Measurement REM
Likelihood Ratio Test (G2) 115.55
P-Value 0.000
2(5;0,10) 9.236

Table 3 illustrates that the simultaneous testing on a Random effect Model (REM), there is obtained a
decision to reject H0, which means the 95 percent of confidence level, at least there has been one
significant parameters in the model, or at least there is one of four predictor variables used has a
significant influence on the Open Unemployment rate in Indonesia. The next is doing a partial test by
the Wald test, in which by using  = 0.10, it is obtained the test results as follows for the Random
Effects Model (REM).
Hypothesis
H0 : q  0
H1 : q  0, q  1, 2,3, 4,5
Statistical test uses Wald Test (W) as follows
ˆ q
W
SE ˆ q 

Table 4. Partial Testing of Parameter Significance Random Effect Model (REM) for Model One
Variable Coefficient Standard Error Wald P-Value Decision
Constants -8.875426 2.826825 -3.14 0.002 Reject H0
X1 -0.0640043 0.0341516 -1.87 0.061 Reject H0
X2 -0.0043435 0.1280856 -0.03 0.973 Failed to Reject H0
X3 -1.395575 0.228173 -6.12 0.000 Reject H0
X4 0.1882437 0.0370685 5.08 0.000 Reject H0
X5 -0.10852 0.0222208 -4.88 0.000 Reject H0
ρ 0.9063091
Table 4 explains that of the five predictor variables there are four significant variables where p-value <
 = 0.10 where significant predictor variables are the growth rate of GDP, Provincial Minimum Wage
and Literacy Rate. Then the following is the equation on panel data probit regression with the Random
Effect Model (REM) approach for Model One.
ŷ*it  8.875426  0.0640043x1i,t  0.0043435x 2i,t  1.395575 x3i,t  0.1882437 x 4i,t  0.010852x5i,t
  0.9063091
And the probability function is as follows.
P    8.875426  0.0640043X1i,t  1.395575 X 3i,t  0.1882437 X 4i,t  0.010852X 5i,t 
Thus, suppose a province in year-t which has the Open Unemployment Rate has met the government's
target with the growth rate of GDP 1.56 percent, minimum provincial wage of 820,000 Rupiahs, literacy
rate of 94.27 percent and gross enrolment rate of 73.7 percent has probability amounted to 0.9122834.
As for a province that has Open Unemployment Rate which do not meet the government's target with
the growth rate of GDP 1.56 percent, minimum provincial wage of 820,000 Rupiahs, literacy rate of
94.27 percent and gross enrolment rate of 73.7 percent has probability of 0.087166.

4.2 Modeling of Probit regression On Panel Data for Model Two

Probit regression on panel data modeling was done namely Random Effects Model (REM) by this
equation,
y*it  0  1x1i,t  3 x3i,t  4 x 4i,t  5 x5i,t  it

4.2.1 Parameter Estimation of Probit regression On Panel Data for Model Two
Parameter estimation probit regression on panel data modeling was done namely Random Effects Model
(REM) by this equation,
ŷ*it  8,884815  0, 0640568x1i,t  1,395753x 3i,t  0,1881922x 4i,t  0,1083948x5i,t
Here is the simultaneous parameter testing for Common Effect Model (CEM) and Random Effects
Model (REM).
Hypothesis
H0 : 1  2  ...  5  0
H1 : at least there is one p  0, p  1,3, 4,5
Statistical test
G 2  2ln  L(
L( ) 
ˆ
 ˆ ) 
Table 5. Simultaneous Parameter Significance Testing
Measurement REM
Likelihood Ratio Test (G2) 115.55
P-Value 0.000
2(5;0,10) 7.77944

Table 5 illustrates that the simultaneous testing on a Random effect Model (REM), there is obtained a
decision to reject H0, which means the 90 percent of confidence level, at least there has been one
significant parameters in the model, or at least there is one of four predictor variables used has a
significant influence on the Open Unemployment rate in Indonesia. The next is doing a partial test by
the Wald test, in which by using  = 0.10, it is obtained the test results as follows for the Random
Effects Model (REM).
Hypothesis
H0 : q  0
H1 : q  0, q  1,3, 4,5
Statistical test uses Wald Test (W) as follows
ˆ q
W
SE ˆ q 

Table 6. Partial Testing of Parameter Significance Random Effect Model (REM) for Model Two
Variable Coefficient Standard Error Wald P-Value Decision
Constants -8.884815 2.813489 -3.16 0.002 Reject H0
X1 -0.0640568 0.0341121 -1.88 0.060 Reject H0
X2 -1.395753 0.2280801 -6.12 0.000 Reject H0
X3 0.1881922 0.0370262 5.08 0.000 Reject H0
X4 -0.1083948 0.0218964 -4.95 0.002 Reject H0
X5 -8.884815 2.813489 -3.16 0.002 Reject H0
ρ 0.9062254

Table 6 explains that of the four predictor variables there are four significant variables where p-value <
 = 0.10 where significant predictor variables are the growth rate of GDP, Provincial Minimum Wage,
Literacy Rate and Gross Enrollment Rate. Then the following is the equation on panel data probit
regression with the Random Effect Model (REM) approach for Model One.
ŷ*it  8,884815  0,0640568x1i,t  1,395753x3i,t  0,1881922 x4i,t  0,1083948x5i,t
  0.9062254
And the probability function is as follows.
P    8,884815  0, 0640568 x1i,t  1,395753 x 3i,t  0,1881922 x 4i,t  0,1083948x 5i,t 
Thus, suppose a province in year-t which has the Open Unemployment Rate has met the government's
target with the growth rate of GDP 1.56 percent, minimum provincial wage of 820,000 Rupiahs, literacy
rate of 94.27 percent and gross enrolment rate of 73.7 percent has probability amounted to 0.912054.
As for a province that has Open Unemployment Rate which do not meet the government's target with
the growth rate of GDP 1.56 percent, minimum provincial wage of 820,000 Rupiahs, literacy rate of
94.27 percent and gross enrolment rate of 73.7 percent has probability of 0.087946.

4.3 Criteria of the Best Model Selection

The criteria for selecting the best model used AIC value criterion, where the smaller the value of
deviancy the less the level of errors generated by the model, in other words the more precise the model
obtained. Here is a probit regression approach on the panel data by using Common Effect Model (CEM)
and Random Effects Model (REM).

Table 7. Best Model Selection Criteria

Probit Regression Approach In Panel Data AIC Value
Random Effect Model (REM) Model One 236.2023
Random Effect Model (REM) Model Two 234.2035
Table 7 illustrates that for probit regression approach on panel data with Random Effect Model (REM)
Model One and Random Effects Model (REM) Model Two, which has the smallest AIC value is the
Random Effect Model (REM) with AIC value of 234.2035.

4.4 Accuracy of Classification

Based on the criteria for selecting the best model, it is showed that the Open Unemployment Rate in
Indonesia with probit regression approach on panel data that has the best model is the Random Effect
Model (REM) Model Two. Here is the accuracy of the classification obtained from the best model of
Random Effects Model (REM) Model Two.

Table 8. The Accuracy of Classification At Random Effects Model (REM) Model Two
Prediction of Open Unemployment Rate in Indonesia
The Open Unemployment
Open Unemployment Rate Open Unemployment Rate >
Rate in Indonesia
≤ Government Target Government Target
Open Unemployment Rate
53 66
≤ Government Target
Open Unemployment Rate
33 145
> Government Target

Table 8 explains that the accuracy of the classification in the Common Effect Model (CEM) has a
classification accuracy 66.67 percent or any 22 Province in Indonesia have same the accuracy of
classification for real condition with model prediction.

4.5 Marginal Effect

Marginal effect used to interpretation probit regression model and get marginal effect for influence
predictor variable to success probability, which example for growth of rate GDP.

P  Y  0    1  β xit 
T

xit

xit
   
 β  1  βT xit   β  ŷ*it 

ŷ*it  8,884815  0,0640568x1i,t  1,395753x3i,t  0,1881922 x4i,t  0,1083948x5i,t

ŷ*it   8,884815  0, 0640568 1, 56   1, 395753  0, 41988   0,1881922  94, 27   0,1083948  73, 7    1, 35351
P  Y  0 
X1
 
 ˆ 1  ŷ*it 

   0,0640568   1,35351 

  0,0640568  0,159624
 0,010225
Thus, suppose the marginal effect of a province in year-t which has the growth rate of GDP with the
Open Unemployment Rate has met the government's target of 0.010225 means that changes in the
growth of GDP by one unit will increase the probility Open Unemployment Rate of 0.010225 already
met government’s target.

5. Conclusion
Based on the analysis and discussion that has been done, it can be concluded as follows.
1. Probit modeling on panel data for Random Effects Model (REM) model one and model two on a case
study of Open Unemployment Rate in Indonesia conclude that growth rate of GDP, the Provincial
Minimum Wage and Literacy Rate and Gross Enrollment Rate together produce significant predictor
variables.
2. The selection of the best criteria conclude that the probit regression approach on the panel data for
Random Effects Model (REM) model two on a case study of Unemployment Rate in Indonesia which
has the smallest AIC value is the Random Effect Model (REM).
3. The accuracy of classification conclude that probit regression approach on the panel data for Random
Effects Model (REM) model two on a case study of Open Unemployment Rate in Indonesia which
has 66.67 percent.
4. The marginal effect of a province in year-t which has the growth rate of GDP with the Open
Unemployment Rate has met the government's target of 0.010225 means that changes in the growth
of GDP by one unit will increase the probility Open Unemployment Rate of 0.010225 already met
government’s target.

6. References
[1] Central Intelegent Agency [CIA]. (2016). The World Factbook of Unemployment. On Juli 25th 2016
from http://www.cia.gov/.
[2] Badan Pusat Statistik [BPS]. (2016). Statistik Indonesia. Jakarta : Badan Pusat Statistik.
[3] Kementerian Perencanaan Pembangunan Nasional [KPPN]. (2014). Rancangan Jangka Menengah
Nasional 2015-2019. Jakarta : KPPN.
[4] Zulhanafi, Aimon, H., and Syofyan, E. (2013). Analisis Faktor-faktor Yang Mempengaruhi
Produktivitas dan Tingkat Pengangguran di Indonesia. Jurnal Kajian Ekonomi, Volume II
Nomor 03.
[5] Tantri, E. (2016). Pengaruh Indikator Kependudukan Terhadap Tingkat Pengangguran Terbuka Di
Indonesia Dengan Pendekatan Regresi Panel. Surabaya : Final Project Department of
Statistics Institut Teknologi Sepuluh Nopember.
[6] Mc Cullagh, P and Nelder, J.A. (1983). Generalized Linear Models Second Edition. London
NewYork : Chapman and Hall.
[7] Goktas, A and Cakmakpayan, S. (2012). A Comparison Binary Logit and Probit Models With
Simulation Study. Journal of Social and Economic Statistics Vol.2, No.1,Summer 2013 pp.1-
17.
[8] Hsiao, C. (2003). Analysis of Panel Data. New York : Cambridge University Press.
[9] Widarjono, A. (2007). Ekonometrika Teori dan Aplikasi untuk Ekonomi dan Bisnis. Yogyakarta :
Ekonisia.
[10] Butler, J.S and Moffit, R. (1982). A Computationally Efficient Quadrature Procedure For The One-
Factor Multinomial Probit Model. Econometrica Vol.50,No.3 pp.761-764.
[11] Suharni. (2015). Estimasi Model Probit Data Panel Pada Rata-rata Jumlah Anak Lahir Hidup di
Propinsi Jawa Timur. Surabaya : Thesis Department of Statistics Institut Teknologi Sepuluh
Nopember.
[12] Widyandini, S. (2016). Pemodelan Ketahanan Pangan Provinsi Di Indonesia Berdasarkan
Konsumsi Energi Menggunakan Metode Probit Data Panel. Surabaya : Thesis Department of
Statistics Institut Teknologi Sepuluh Nopember.
[13] Butler, J.S and Moffit, R. (1982). A Computationally Efficient Quadrature Procedure For The One-
Factor Multinomial Probit Model. EconometricaVol.50,No.3 pp.761-764.
[14] Heckman, J. (1979). Sample Selection Bias as Specification Error. Econometrica, 47, Applied
Econometrics, 4.
[15] Greene, W. (2008), Econometric Analysis 6th Edition. New Jersey : Pearson Prentice Hall.
[16] Agresti, A. (2002). An Introduction to Categorical Data Analysis. New Jersey : John Wiley & Sons.

Acknowledgments
On this occasion, the author would like to thank to Badan Pusat Statistik (BPS) which has been granted
permission to use their data as a case study. In addition, the authors also thank to other parties who
contributed to the completion of this analysis.