Analysis of Causality Interactions Between Education, Inequality, and Unemployment Toward Poverty in East Java: Empirical Evidence from Dynamic Panel Co-integration Model

Authors

  • Indrawan Firdauzi Master Program of Economics, Faculty of Economics and Business, Universitas Gadjah Mada, Special Region of Yogyakarta https://orcid.org/0000-0001-6457-3850
  • Ni Made Ratih Kusuma Dewi Master Program of Economics, Faculty of Economics and Business, Universitas Gadjah Mada, Special Region of Yogyakarta

DOI:

https://doi.org/10.18196/jerss.v6i1.13568

Keywords:

Education, Inequality, Unemployment, Poverty, Granger Causality

Abstract

The issue of poverty has been faced for a long time. In Indonesia today, East Java is the most significant contributor to the poor people. With various policies that the government has implemented, the issue of poverty remains unsolved. This study, therefore, discusses the causality relationship between education, inequality, and unemployment toward poverty in East Java. Using secondary data from the Central Statistics Agency of Indonesia (BPS), we estimated dynamic panel data of cities and regencies in East Java from 2012 to 2017. Employing the Granger causality approach, it was found that education has a one-way relationship with inequality and a two-way relationship with unemployment. In addition, poverty has a one-way relationship with all the variables used. In the long term, education has a negative correlation with poverty. According to our findings, both the government and the private sector need to expand more job opportunities and improve education for the poor as both sectors significantly reduce poverty in the long term.

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Published

2022-02-28

How to Cite

Firdauzi, I., & Dewi, N. M. R. K. (2022). Analysis of Causality Interactions Between Education, Inequality, and Unemployment Toward Poverty in East Java: Empirical Evidence from Dynamic Panel Co-integration Model. Journal of Economics Research and Social Sciences, 6(1), 64–75. https://doi.org/10.18196/jerss.v6i1.13568

Issue

Vol. 6 No. 1: February 2022

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Articles

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