Analysis of Macro Variable and Human Capital on Poverty And Economic Growth in Indonesia

Ariusni, Ariusni (2016) Analysis of Macro Variable and Human Capital on Poverty And Economic Growth in Indonesia. In: Proceeding International Conference Local wisdom for Re-Thinking Global Solutions, 21-23 September 2016, Padang.

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Abstract

The aim of this study was to analyze the effect of the unemployment rate, sex ratio and population density affect the level of poverty in Indonesia. The influence of the unemployment rate, level of education and health affect the value of production (GDP) in Indonesia. The population in this study were all provinces in Indonesia. In this study, the sample size is as much as 33 provinces of Indonesia. This research was conducted in Indonesia during the period 2006-2012. Technique of data collecting secondary data with the data panel approach (pooling data). This method combines two types of data: the data cross where (cross-section) with time series data (time series). The model used in this study is a model of simultaneous equations with two stage least square with the approach of fixed effect model (FEM) after the test Chow and Hausman Test. Results of the study found that in the first equation is the influence of positive and significant correlation between the unemployment rate (X1) with the level of poverty in the provinces in Indonesia. The variable sex ratio (X4) on the level of poverty in the Indonesian provinces is a significant negative effect. The influence of the ratio of population density variable (X5) on the level of poverty is positive and significant. Variable value of GDP (Y2cap) to poverty rate is negative and significant. In the second equation is found the results are the effect of a negative and significant correlation between the unemployment rate to the value of production (GDP) in the provinces in Indonesia. The influence of education variable (X2) the value of production (GDP) is positive and significant. Influence health variables (X3) to the value of production (GDP) is positive and significant. Variables influence the poverty level (Y1cap) to the value of production (GDP) is negative and not significant in the provinces in Indonesia. The government should always strive to improve human capitalnya in order to reduce poverty and increase the value of production in Indonesia. High participation of women in development are important because it can reduce the level of poverty in Indonesia. More and more Indonesian women contribute in the construction of the lower level of poverty. The government should create a policy that there is equity in the distribution of the population due to the increasingly dense population actually increased poverty. Therefore, the government should carry out resettlement in order to lower poverty

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