The Impact of Main Port Accessibility on Structural Transformation in Indonesia

Abstract

Indonesia's structural transformation remains uneven across regions, with persistent gaps in labor productivity between traditional and modern sectors. This study analyzes the effect of geographic accessibility on labor structural transformation in Indonesia, focusing on the role of ports in driving economic sector shifts. The study uses panel data of 289 districts/cities for the period 2017-2022 and the Panel-Corrected Standard Errors (PCSE) method. The results found that regions with better port access experienced an increase in the proportion of labor in the industrial, trade, and service sectors. Meanwhile, remote areas remain dependent on the agricultural sector. This finding confirms that port infrastructure plays an important role in diversifying the employment structure. In addition, education, GRDP per capita, and urbanization variables are proven to significantly accelerate structural transformation. This research provides important policy implications for logistics infrastructure development and human capital strengthening in order to promote inclusive economic growth.