Economy-Employment Dynamics In an Integrated Industrial Zone: Empirical Evaluation and Evidence-Based Policy Recommendations for Gresik Regency, 2024–2025

Abstract

This article analyzes the relationship between macroeconomic growth and employment conditions in Gresik Regency based on secondary data from Statistics Indonesia (BPS) for 2024–2025. Employing a descriptive-comparative approach within the frameworks of Okun’s Law and structural transformation theory, the study evaluates the extent to which economic growth of 4.79% has generated inclusive employment. The findings indicate that Gross Regional Domestic Product (GRDP) at current prices reached IDR 188,604.51 billion, with the manufacturing sector accounting for the dominant share (51.25%). This economic structure is associated with a decline in the Open Unemployment Rate (OUR) to 5.47% and an increase in formal employment to 56.16% as of August 2025. However, the inclusiveness of growth remains constrained by a substantial gender gap in labor force participation, amounting to 30.84 percentage points; an educational profile of the workforce dominated by those with lower-to-middle levels of educational attainment (69.37%); and the risk of capital–labor substitution in the manufacturing sector. Based on the empirical evidence, the study recommends revitalizing industry-based vocational education, providing childcare facilities to promote women’s empowerment, diversifying the economy toward productive service sectors, and implementing gradual formalization programs for informal workers to strengthen regional economic resilience amid automation and globalization..