Determinants of Poverty in Indonesia: An Empirical Evidence using Panel Data Regression

Adhityas Firdaus,Muhammad Abrar,Taufiq C Dawood

doi:10.47194/ijgor.v2i4.90

Adhityas Firdaus, Muhammad Abrar + Show 1 more

Open Access

https://doi.org/10.47194/ijgor.v2i4.90

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Abstract

This study aims to analyze the effect of the rate of economic growth, average length of schooling, dependency ratio, and life expectancy on the percentage of poor people in Indonesia. This study uses panel data consisting of 34 provinces in Indonesia during the period 2016 to 2020. The analysis model used in this study is a panel data regression model. The results found in this study are variables that have a significant effect on the percentage of poor people in Indonesia are the average length of schooling, dependency ratio, and life expectancy. Meanwhile, the variable rate of economic growth has not had a statistically significant effect on the percentage of poor people in Indonesia. The variables of average length of school and life expectancy have a negative and significant effect on the percentage of poor people so that aspects of the quality of human resources represented by the level of education and health have an important role in poverty alleviation. Meanwhile, the dependency ratio has a positive and significant effect on the percentage of the poor, so various policies are needed to control population growth so that the productive population does not have too high a burden to bear the needs of the non-productive population.

Highlights

Equitable economic development for the sake of equality of welfare is the goal of many regions
Economic development is closely related to economic growth where economic development will accelerate the rate of economic growth in a region with the aim of reducing inequality as an indicator to be able to state that the perceived welfare is evenly distributed (Firdaus & Witomo, 2014)
The resulting policies focus on economic development that focuses on improving the quality of human resources such as education and health as well as providing various assistance, both consumptive and productive (Ali et al, 2016)

Summary

Introduction

Equitable economic development for the sake of equality of welfare is the goal of many regions This is inseparable from the comprehensive impact of economic development on various social and economic sectors in various circles of society. The resulting policies focus on economic development that focuses on improving the quality of human resources such as education and health as well as providing various assistance, both consumptive and productive (Ali et al, 2016). These various policies have not been able to reduce the poverty level significantly. This is inseparable from the existence of poverty alleviation programs that are not in accordance with the characteristics of the poor in the region

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