The Influence of Key Sectors, Average Years of Schooling, and Labor Force Participation Rate on Poverty in Aceh Province Through Economic Growth

Abstract

This research explores the potential role of key economic sectors, average schooling duration, and labor force participation rates in reducing poverty in Aceh Province. The study utilizes data from 2016 to 2022 and applies the Autoregressive Distributed Lag (ARDL) method to examine both short-term and long-term relationships between these variables and poverty reduction. The objectives of this study are to identify the impact of these factors on poverty levels and to assess their contribution to economic growth. The research findings indicate that in the long term, leading economic sectors, average schooling duration, and labor force participation positively influence economic growth. However, only average schooling duration significantly affects economic growth in the short term. Furthermore, the results demonstrate that long-term economic growth and labor force participation play a significant role in reducing poverty. In contrast, leading sectors and average schooling duration negatively influence poverty levels. In the short term, economic growth and leading sectors also negatively impact poverty. Moreover, the Sobel test confirms that economic growth mediates the influence of these variables on poverty reduction in the long term. In the short term, only average schooling duration serves as a mediator. The implications of this study highlight the importance of government efforts to develop critical economic sectors, improve the quality of education, and enhance workforce training to stimulate economic growth and reduce poverty in Aceh.