Abstract
The high inequality of income distribution that occurs in the Special Region of Yogyakarta Province shows that economic development has not succeeded in bringing equity to the community. For this reason, an analysis is needed to determine the factors that inequality of income distribution in order to reduce inequality of income distribution that occurs in the Province of DI Yogyakarta. The purpose of this study was to determine the effect of economic growth, HDI, Distric/City Minimum Wage, and Unemployment. This research uses secondary data obtained from the Central Statistics Agency of D.I Yogyakarta Province. The data in this research is panel data consisting of cross section data from 5 districs/cities and time series data for 2010-2018. The data analysis used was panel data regression analysis with the Fixed Effect regression model. The results of the regression analysis show that economic growth does not have a significant effect on inequality of income distribution. Meanwhile, HDI, Distric/City Minimum Wages and Unemployment have a significant effect on the inequality of income distribution. HDI has a negative effect, while Distric/City Minimum Wage and Unemployment have a positive effect on inequality of income distributed in the Province of DI Yogyakarta in 2010-2018
Highlights
Economic development is basically aimed at improving people's welfare
This study aims to determine the effect of economic growth, Human Development Index (HDI), District/City Minimum Wage and Unemployment on the inequality of income distribution in the districts/cities of DI Yogyakarta Province in 2010-2018
Economic growth does not have a significant effect on inequality of income distribution
Summary
Economic development is basically aimed at improving people's welfare. The problem of inequality in income distribution will hinder development because it has a negative impact on the economic stability and political stability of a country. The increasing inequality of income distribution will widen the gap between the rich and the poor, becoming a challenge for economic development in Indonesia. Inequality of income distribution in Indonesia as measured by the Gini Ratio shows a decline during the 2010-2018 period. Inequality of income distribution in DI Yogyakarta Province has increased and has become the province with the highest inequality of income distribution in Indonesia (BPS, 2019). Inequality in income distribution is an important issue that must be addressed in order to improve people's welfare
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