Economic Growth Vs. Poverty in Indonesia: What has Happened?
1Asmiyati Khusnul Maryam, 2Ayus Ahmad Yusuf, 3Anton Sudrajat
1,2,3IAIN Syekh Nurjati, Cirebon – West Java
https://doi.org/10.47191/jefms/v7-i4-15ABSTRACT:
West Java is one of Indonesia’s three biggest contributors to GDP. The rate of economic growth in the province is also the highest on the island of Java, but it does not make West Java free from poverty. The fact, this smart province is the second poorest province nationally. The purpose of this study is to estimate the relationship and influence between economic growth, inequality, and poverty in West Java province using panel data. This study also analyses the characteristics of West Java’s economic growth using the Growth Incidence Curve (GIC). The panel data consists of combination of time series and cross section data from 2013-2022 period, based on information from 27 districts in West Java province. The estimation model employed in this study is panel regression model utilizing Random Effect Model (REM). The results of the study reveal a negative and significant effect of the economic growth on poverty. Furthermore, the inequality variable has a positive and significant impact on poverty. Based on GIC, West Java’s economic growth has not been pro-poor yet from the 2012-2022 period.
KEYWORDS:
economic growth, inequality, poverty, pro-poor
REFERENCES:
1) Abdullah, R., Fahmid, M. M., & Abdullah, I. (2018). Segitiga Pertumbuhan, Kemiskinan dan Ketimpangan di Indonesia. Indef Monthly Policy Brief, 1(3).
2) Afandi, A., Rantung, V. P., & Marashdeh, H. (2017). Determinant of income inequality in Indonesia. Economic Journal of Emerging Markets, 9(2), 159–171. https://doi.org/10.20885/ejem.vol9.iss2.art5
3) Aprillia, A., Wardhani, R. S., & Akbar, M. F. (2021). ANALYSIS OF FACTORS AFFECTING POVERTY IN THE PROVINCE OF THE BANGKA BELITUNG ISLANDS. Jurnal Ilmu Ekonomi Terapan, 6(2), 188. https://doi.org/10.20473/jiet.v6i2.29184
4) Bui, A. T., Nguyen, C. V., & Pham, T. P. (2017). Poverty among ethnic minorities: the transition process, inequality and economic growth. Applied Economics, 49(31), 3114–3128. https://doi.org/10.1080/00036846.2016.1254341
5) Charles, V., Gherman, T., & Paliza, J. C. (2022). The Gini Index: A Modern Measure of Inequality. In Modern Indices for International Economic Diplomacy (pp. 55–84). Springer International Publishing. https://doi.org/10.1007/978-3-030-84535- 3_3
6) De Silva, I., & Sumarto, S. (2014). Does Economic Growth Really Benefit the Poor? Income Distribution Dynamics and Pro- poor Growth in Indonesia. Bulletin of Indonesian Economic Studies, 50(2), 227–242. https://doi.org/10.1080/00074918.2014.938405
7) Fernando, D., & B Amar, S. (2021). Hubungan Kausalitas Antara Ketimpangan Pendapatan, Pertumbuhan Ekonomi, dan Kemiskinan di Indonesia. Jurnal Kajian Ekonomi Dan Pembangunan, 3(2), 45–32.
8) Hasyim, A. I. (2016). Ekonomi Makro. Prenadamedia Group.
9) Ho, S.-Y., & Iyke, B. N. (2018). Finance-growth-poverty nexus: a re-assessment of the trickle-down hypothesis in China. Economic Change and Restructuring, 51(3), 221–247. https://doi.org/10.1007/s10644-017-9203-8
10) Jamil, B., Yaping, S., Ud Din, N., & Nazneen, S. (2022). Do effective public governance and gender (in)equality matter for poverty? Economic Research-Ekonomska Istraživanja, 35(1), 158–174. https://doi.org/10.1080/1331677X.2021.1889391
11) Jayadi, D. S., & Bata, A. G. (2016). PERAN PERTUMBUHAN EKONOMI DALAM MENURUNKAN KEMISKINAN DI TINGKAT PROVINSI DI INDONESIA TAHUN 2004–2012. MODUS , 28(1), 87–99.
12) Lakner, C., Mahler, D. G., Negre, M., & Prydz, E. B. (2022). How much does reducing inequality matter for global poverty? The Journal of Economic Inequality, 20(3), 559–585. https://doi.org/10.1007/s10888-021-09510-w
13) Muthia, A. (2019). Analisis Pro-poor Growth Melalui Identifikasi Pengaruh Pertumbuhan Ekonomi Terhadap Ketimpangan Pendapatan dan Kemiskinan Di Indonesia Tahun 2010-2015. Indonesian Journal of Applied Statistics, 2(2).
14) Nasir, A., & Mridha, H. A. (2017). Does income inequality dampen growth effect on poverty? evidence from the US county data. The Journal of Developing Areas, 51(4), 167–177. https://doi.org/10.1353/jda.2017.0095
15) Permadi, Y. A. (2018). Growth, Inequality, and Poverty: An Analysis of Pro-Poor Growth in Indonesia. Jurnal Ekonomi Kuantitatif Terapan. https://doi.org/10.24843/JEKT.2018.v11.i02.p08
16) Primadianti, N., & Sugiyanto, C. (2020). KETIMPANGAN REGIONAL, PERTUMBUHAN EKONOMI PRO POOR, DAN KEMISKINAN DI NUSA TENGGARA BARAT. Jurnal Dinamika Ekonomi Pembangunan, 3(1), 1–20.
17) Puspitarini, R. C., & Anggraini, I. (2018). Trickle-Down Economics Arthur Lewis dan Ekonomi Pembangunan Wisata Gunung Bromo di Desa Ngadisari, Kabupaten Probolinggo, Jawa Timur Tahun 2017-2018. Nation State: Journal of International Studies, 1(2).
18) Suparman, S., & Muzakir, M. (2023). Regional inequality, human capital, unemployment, and economic growth in Indonesia: Panel regression approach. Cogent Economics & Finance, 11(2). https://doi.org/10.1080/23322039.2023.2251803
19) Trinugroho, I., Achsanta, A. F., Pamungkas, P., Saputro, N., & Yuniarti, S. (2023). Democracy, economic growth, and income inequality: Evidence from province level data. Cogent Economics & Finance, 11(1). https://doi.org/10.1080/23322039.2023.2220244
20) Uzawa, H. (2018). Models of Growth. In The New Palgrave Dictionary of Economics (pp. 8885–8894). Palgrave Macmillan UK. https://doi.org/10.1057/978-1-349-95189-5_860
21) Wibowo, T. (2016). Ketimpangan Pendapatan dan Middle Income Trap. Kajian Ekonomi Keuangan, 20(2).
22) Wishartama, R. E., Zulgani, & Rosmeli. (2022). Analisis kausalitas pertumbuhan ekonomi terhadap ketimpangan distribusi pendapatan di Indonesia (1999-2019) Granger Causality. E-Jurnal Perspektif Ekonomi Dan Pembangunan Daerah, 11(1), 37– 46.
