Skill Mismatch and Local Labor Absorption in the Context of Industrialization: Evidence from Subang Regency, Indonesia

Abstract

This study aims to analyze skill mismatch and local labor absorption in the context of industrialization in Subang Regency. The main issue addressed is the suboptimal absorption of local labor despite increasing investment and industrial sector development. This study employs a qualitative approach using a descriptive-analytical method and utilizes secondary data from the Central Bureau of Statistics, international institutional reports, and relevant academic literature. The findings indicate a significant skill mismatch between local workers and industrial demands. High unemployment, particularly among youth, is influenced by the mismatch between graduates’ competencies and labor market requirements, as well as weak school-to-work transition processes. In addition, industrialization in Subang exhibits characteristics of jobless growth, where economic expansion is not accompanied by proportional employment absorption. This study highlights that the success of industrialization depends on the quality of local human resources. Therefore, integrated policy interventions are required, including strengthening industry-based vocational training, improving the alignment between education and the labor market, and enhancing access to labor market information.