Abstract
Last decade, Indonesia's economic growth experienced a downward trend. The study examines the role of investment, equality in education, poverty, income inequality, and regime to economic growth in Indonesia. We used time-series data between 1970-2017. It was obtained from BPS and World Bank (Indodapur) publications. The model used is the Weighted Least Square Regression (WLS). The results showed the factors that contributed significantly to increasing Indonesia's economic growth were education equality, poverty, and income inequality. While investment/capital, economic transparency, and the regime did not significantly contribute to increasing economic growth. Expanding access to education for high school or equivalent is important by the Government, including the development of school infrastructure in remote areas and teacher distribution. The Government should maintain the poverty trend that continues to decline. The future study dynamic models look at the long-term relationships related to education equality, distribution of income, and poverty on economic growth.
Highlights
Last decade (2007 – 2017), Indonesia's economic growth experienced a downward trend
The current study examines the role of investment, education equality, poverty, income inequality, economic openness, and regime to economic growth in Indonesia
The Weighted Least Square Regression (WLS) method was the same as the ordinary least square (OLS) method by minimizing the number of residuals, but the WLS method was weighted by an appropriate factor and using the OLS method for the weighted data
Summary
Last decade (2007 – 2017), Indonesia's economic growth experienced a downward trend. It reflects the extent to which economic activity (Henderson, Storeygard, & Weil, 2012) declined. The previous study found that physical and capital factors determine economic growth by 80%, and the remaining 20% is caused by other factors (Mankiw, Romer, & Weil, 1992). Another study conducted in Southeast Asian countries showed that after being down and stable during the 1970s and 1980s when those countries experienced a high average rate of economic growth each year, in the early 1990s, inequality in income distribution in these countries began to enlarge again (Ahuja, Bidani, Ferreira, & Walton, 1997). Since there is a research gap between education, income inequality, and economic growth, this study was conducted. The research results are expected to contribute to add to the previous literature, but to contribute to the acceleration of economic growth through policies to increase educational equity, poverty reduction, and income distribution
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
