The Impact of Educational Conditions on Income Inequality and Economic Growth in South Sumatra

Abstract

Before and during the COVID-19 pandemic, income inequality and economic growth in South Sumatra experienced fluctuating conditions that could hinder learning and education activities. This study aims to examine the effect of educational conditions, consisting of the average length of school (RLS), literacy rate (AMH), pure participation rate (APM), and percentage of 15+ population of senior high school level (PPTP) on income inequality and economic growth in South Sumatra. Data were obtained from the BPS-Statistics of South Sumatra. The current study implemented panel data regression analysis on cross-sectional data from 16 cities/regencies in South Sumatra and time series 2017–2021. The research findings in the first equation show that RLS has a significant effect on reducing income inequality. AMH, APM, and PPTP do not significantly reduce income inequality. The second equation shows that APM and PPTP have a significant effect on economic growth, while RLS and AMH have no significant effect on economic growth. The influence of education on several of these factors has not reduced income inequality and economic growth caused by the COVID-19 pandemic. Apart from that, the APBD’s focus has been redirected to coping with the COVID-19 case; therefore, education has received less attention for this condition. Regional government efforts need to be increased by utilizing school operational assistance for people experiencing poverty and increasing the allocation of education funds above 20% so that compulsory education becomes 12 years. Keywords: COVID-19, economic growth, income inequality, length of school average, pure participation rate