Government Spending on Education, Health, and Minimum Wages as Predictors of Human Development Index: Study of Selected Provinces of Indonesia

Abstract

The study objective was to test the influence of three factors namely government spending on education, health, and minimum wages on human development index in five selected provinces of Indonesia. The method of analysis is the Panel-data based analysis covering the time period of 2007 to 2016. The study is focused towards five selected provinces in Indonesia including Bangka Belitung, Lampung, Bengkulu, South Sumatra, and Jambi. The results show that government spending on education and health bring positive but insignificant effects on human development index; whereas, minimum wages turned out to be positive and significantly influencing human development index. Overall the HDI average is not much different and there is no discrepancy between provinces in Southern Sumatra from the range of 68 percent to 70 percent. However, of the five provinces in Southern Sumatra, there are two provinces with higher HDI figures than the others, namely Jambi Province and Bangka Belitung Province.

Enhancing Human Capital in Indonesia: Does Economic Policy Work?

“…Lack of calories, nutrition, or low health status for the Population (POP) will result in low quality human beings with retarded mental levels. The results of this study support the research of Widodo et al [32], where the Health Budget (HB) had no effect on HDI in Indonesia in the 2007-2016 period. However, these results are inconsistent with researches of Razmi et al [10] in Iran and Çağlayan-Akay and Van [3] in 130 countries showing that HB has a positive effect on HDI.…”

“…The Education Budget (EB) has a significant positive effect on HDI in all models. These results are consistent with the studies of Mongan [30], Nurdiana et al [16], and Nurvita et al [31] but inconsistent with Widodo et al [32] and Yogiantoro et al [33]. Education broadens one's opportunities.…”

Determinant of HDI in Yogyakarta Special Region Province

“…The results of this regression are in line with the results of research by Widodo et al (2019), where the UMP has a positive and significant effect on HDI. An increase in the minimum wage will result in an increase in the need for decent living, so that there will also be an increase in the standard of living.…”

“…Research conducted by Sunarsih, et al (2019), andWidodo, et al (2019), the results of the study show that the minimum wage variable has a positive and significant effect on HDI. Research conducted by Jamaliah andAmalia (2019) andHakiki, et al (2020) shows results that the LFPR variable has a positive and significant effect on HDI.…”

Analisis Determinan Indeks Pembangunan Manusia di Indonesia Tahun 1990-2021

“…Hasil berlawanan ditemui dalam hasil kajian Prasetyo & Zuhdi (2013) bahwa pengeluaran pemerintah tidak signifikan berpengaruh terhadap peningkatan sektor pendidikan dan kesehatan di banyak negara berkembang. Hasil yang relatif sama juga ditemukan Widodo et al (2020) yang menyimpulkan pengeluaran pemerintah daerah tidak berpengaruh terhadap indeks pembangunan manusia di beberapa propinsi di Indonesia. Berdasarkan kerangka konsep teori yang telah diuraikan, maka dapat disusun hipotesis kedua berikut: H2: Pengeluaran pemerintah di sektor pendidikan berpengaruh signifikan terhadap Indeks Pembangunan Manusia di Indonesia.…”