Economic Growth, Human Capital, Public Investment, and Poverty in Underdeveloped Regions in Indonesia

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Published: Oct 20, 2022
DOI: https://doi.org/10.18196/jesp.v23i2.15307
Keywords:
Economic Growth, Human Capital, Public Investment, Poverty, Underdeveloped Region

Main Article Content

Taosige Wau
Department of Sharia Economics, Faculty of Islamic Economics and Business, State Islamic University Sunan Kalijaga, Special Region of Yogyakarta
https://orcid.org/0000-0003-0793-9742

Abstract

Poverty is a worldwide issue since its effects are widespread. In Indonesia, most pockets of poverty are found in rural or underdeveloped areas. This research is essential as a reference for addressing the issue of poverty in Indonesia's undeveloped regions, as few studies have analyzed the causes of poverty in underdeveloped regions. This study analyses the impact of economic growth, human capital, and public investment on the alleviation of poverty in Indonesia’s undeveloped regions. This study employs panel data from 62 underprivileged regions in Indonesia according to Presidential Decree No. 63 of 2020 with an observation period of 2010-2020. The analytical method used is the ECM panel model. The unit root test indicates that the research data is steady and cointegrated at the first level of differentiation. This study demonstrates that economic growth does not have a substantial influence on poverty levels in underdeveloped areas of Indonesia, although human capital and public investment do, both in the short and long term. Human capital contributes more to reducing poverty in disadvantaged areas, but state investment increases the number of poor in Indonesia's underdeveloped regions.

Article Details

How to Cite
Wau, T. (2022). Economic Growth, Human Capital, Public Investment, and Poverty in Underdeveloped Regions in Indonesia. Jurnal Ekonomi &Amp; Studi Pembangunan, 23(2), 189–200. https://doi.org/10.18196/jesp.v23i2.15307
Issue
Vol. 23 No. 2: October 2022
Section
Articles

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