STUDI EMPIRIS MODEL GRAVITASI REMITANSI TENAGA KERJA INDONESIA TAHUN 2006-2015
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Remittance is one of the main resources of contry’s income, especially for developing countries. Based on the World Bank reports, total remittance of Indonesia in 2015 reached USD 9,418 million. In this study, the gravity model is tested to find the impact of distance and the size of host countries toward remittance, whether the further the distance of the host countries will reduce the remittance and whether the greater the economic size of the host countries will increase the remittance. The author used several variables, such as Gross Domestic Product (GDP) of host countries, GDP of home country (Indonesia), the distance between Indonesia to host countries, the number of Indonesian workers in the host country, population in the host countries, Political Stability Index in the host countries, and labor productivity in the host countries. Using bilateral data of 26 major host countries from 2006 to 2015, panel data with fixed effect model through mundlak approach is selected to resolve the problem of time-invariant. GDP of host countries, GDP of sending country, distance, the number of Indonesian workers, and the population number and labor productivity in the host countries have significant effect on the remittance of Indonesia, while the Political Stability Index has no effect. As implied by this study, distance has negative effect on the remittance of Indonesia, GDP of host countries has negative effect, whereas GDP of sending country has positive impact on the remittance of Indonesia. Therefore, it can be inferred that the gravity model is relevant in the context of Indonesian remittance.