Determinant Factors Poverty of Relativity in Banten Province: A Panel Data Analysis

Abstract

The problem of the poverty of relativity today is still a crucial topic considering the economic conditions in Indonesia are experiencing a slump due to Covid-19. The problem of poverty relativity is one of the main points that must be faced by the government in providing social protection assistance policies as a form of economic recovery during the Covid-19. The poverty of relativity in Banten Province is relatively high even though it has been ranked 10 nationally. Therefore, this study aims to analyze the relationship between unemployment, income inequality, and human capital as well as find out which level is very dominant in the long run on each of the variables that directly affect the relativity of poverty in Banten Province. This study examines how changes in economic indicators occur due to the Covid-19 pandemic in 8 Regencies/Cities of Banten Province. The analysis of this study uses panel data regression using the method Fixed Effect Model (FEM) in 8 regencies/cities in Banten Province in the data range from 2016 to 2020. The results of this study indicate that unemployment due to layoffs has a positive and significant influence on the relativity of poverty in 8 districts/cities of Banten Province. Furthermore, this study shows that income inequality has no significant and positive effect on the relativity of poverty. Meanwhile, human capital appears to be one of the dominant factors that can have a negative and significant impact on economic recovery and reduce the relative impact of poverty during the Covid-19 pandemic.

The Influence of Social Assistance Expenditure, Education, and Unemployment on Poverty in Districts/Municipalities of D.I. Yogyakarta Province 2013-2022

“…Becker said that a highly educated person, meaning that they have spent enough time (years of schooling), will earn a better income and is less likely to fall into poverty. This opinion is also corroborated by (Desmawan et al, 2021) that human resources, which can be measured through the Human Capital Index, have a significant influence in reducing poverty. Increased investment in education can increase the productivity of individuals and help them get out of the poverty cycle.…”

The Effect of Family Economy on Education Opportunities (Analysis of the Impact of Parents' Irregular Income on Millennial Children's Educational Opportunities in the DKI Jakarta Area)

“…This data is certainly not in line with the theory that education can play an important role in alleviating poverty. The indisputable fact is that in its old age when related to the average age of Indonesian people, this nation has not been able to get out of the poverty trap, even though Indonesia has experienced significant economic development (Desmawan et al, 2021). This shows that poverty is still a multidimensional problem that can not only be solved through education, many factors are correlated both directly and indirectly, meaning that as a multidimensional phenomenon poverty must therefore also use a multidimensional approach as well.…”

Impact of Economic Growth, Minimum Wage, Labor Force Participation Rate, and Population Size on the Open Unemployment

“…According to Keynesian theory, as discussed in (Desmawan et al, 2021), unemployment is caused by low aggregate demand, which leads to a slowdown in economic growth. The main cause is not considered to be a decline in production, but rather a decrease in the level of consumption.…”

“…If many workers shift to the informal sector due to insufficient formal job opportunities or inadequate qualifications, they may be classified as hidden unemployed. Hidden unemployment occurs when the workforce in an economic activity exceeds the actual requirement (Desmawan et al, 2021). An increase in labor force participation moving into the informal sector can explain the statistically insignificant reduction in the unemployment rate, as official unemployment data may not fully capture those in the informal sector.…”