How Regional Income Affects Poverty Reduction: A Study of Central Java (2017-2020)
Main Article Content
Maulana Ghani Yusuf*
Tangguh Pratysto
Poverty remains one of the most pressing development challenges in Central Java, where regional disparities and limited fiscal capacity continue to hinder the effectiveness of poverty alleviation programs. Despite substantial transfers from the central government, inefficiencies in fund allocation combined with low fiscal independence at the local level have slowed progress in reducing poverty. This study examines the impact of regional fiscal instruments and macroeconomic factors on poverty levels across 34 districts and cities in Central Java from 2017 to 2020. Using panel data and the Feasible Generalized Least Squares (FGLS) method, supported by diagnostic tests to ensure the model meets the BLUE (Best Linear Unbiased Estimator) criteria. The findings reveal that Regional Original Income (PAD), Other Legitimate Income, and Gross Regional Domestic Product (GRDP) per capita play a role in reducing poverty, although the effects of PAD and Other Legitimate Income are only marginally significant. By contrast, Balancing Funds from the central government are positively and significantly associated with higher poverty rates, suggesting inefficiencies in their distribution and utilization. The Open Unemployment Rate is found to have no significant effect on poverty during the study period. Taken together, these results underscore the importance of strengthening local fiscal capacity, enhancing the efficiency of central government transfers, and promoting inclusive economic growth as integral components of long-term poverty reduction strategies in the region.
Adisasmita, R. (2011). Manajemen pemerintah daerah. Graha Ilmu.
Alkire, S., & Foster, J. (2011). Counting and multidimensional poverty measurement. Journal of Public Economics, 95(7–8), 476–487. https://doi.org/10.1016/j.jpubeco.2010.11.006
Arsyad, L. (2010). Ekonomi Pembangunan Edisi 5. UPP STIM YKPN.
Bžanová, K., & Kováč, O. (2024). The Relationship Between Unemployment and the Risk of Poverty in the Slovak Republic. EDAMBA 2023: Conference Proceedings, 24–34. https://doi.org/10.53465/EDAMBA.2023.9788022551274.24-34
Dewi, W. K., Febrianingsih, F., Anindya, A. A., Ariyani, L., & Wicaksono, D. A. (2025). Peran Strategis Pemerintah Kota Medan Dalam Penguatan Pengelolaan Pendapatan Asli Daerah Tahun Anggaran 2023. Journal of Innovative and Creativity, 5(2). https://doi.org/10.31004/joecy.v5i2.1529
Elsby, M. W., Hobijn, B., & Sahin, A. (2010). The Labor Market in the Great Recession. NBER Working Papers 15979.
Falah, M. A., & Rahmawati, F. (2024). The GRDP per capita, human development index, open unemployment rate, regional expenditure, and poverty in East Java Province. Jurnal Ekonomi & Studi Pembangunan, 25(1), 1–16. https://doi.org/10.18196/jesp.v25i1.21327
Halim, A. (2007). Akuntansi Keuangan Daerah. Salemba Empat.
Isfianadewi, D., Hasanah, L. lak N. El, & Priyadi, U. (2024). Aligning Public Financial Management with SDGs: Efficient Utilization of Privileged Funds for Enhancing Quality of Life. Journal of Lifestyle and SDGs Review, 5(2), e03340. https://doi.org/10.47172/2965-730X.SDGsReview.v5.n02.pe03340
Islam, R. (2002). Attacking Poverty. World Bank Publications.
Mardiasmo. (2009). Akuntansi Sektor Publik. Andi.
Ngubane, M. Z., Mndebele, S., & Kaseeram, I. (2023). Economic growth, unemployment and poverty: Linear and non-linear evidence from South Africa. Heliyon, 9(10), e20267. https://doi.org/10.1016/j.heliyon.2023.e20267
Putih, I. T., & Primandhana, W. P. (2024). Analysis of the Effect Economic Growth, Open Unemployment Rate, Education, and PAD on Poverty Rate in Lumajang District. Journal of Business Management and Economic Development, 2(02), 615–625. https://doi.org/10.59653/jbmed.v2i02.675
Rahmadewi, D. E. (2018). Pendapatan Asli Daerah, Pendapatan Transfer, Penerimaan Pembiayaan Dan Realisasi Belanja Modal Provinsi Bengkulu. Jurnal Riset Akuntansi & Perpajakan (JRAP), 5(01), 108–118. https://doi.org/10.35838/jrap.2018.005.01.10
Renahy, E., Mitchell, C., Molnar, A., Muntaner, C., Ng, E., Ali, F., & O’Campo, P. (2018). Connections between unemployment insurance, poverty and health: a systematic review. European Journal of Public Health, 28(2), 269–275. https://doi.org/10.1093/eurpub/ckx235
Saputri, A., Badriah, L. S., & Supriadi, D. (2023). The effect of GRDP, education, and gender empowerment index on poverty. Jurnal Ekonomi Dan Bisnis, 26(2), 373–392. https://doi.org/10.24914/jeb.v26i2.8797
Sen, A. (1999). Development as freedom. Oxford University Press.
Seymour, R., & Turner, S. (2002). Otonomi daerah: Indonesia’s decentralisation experiment. New Zealand Journal of Asian Studies, 4, 33–51.
Sihombing, T. D., Gurusinga, L. B., & Yusnaini, Y. (2025). Efektivitas Kinerja Keuangan Pemerintah Provinsi Sumatera Utara Dalam Rangka Meningkatkan Pendapatan Asli Daerah Guna Mendorong Pertumbuhan Ekonomi. Benefit: Journal of Bussiness, Economics, and Finance, 3(2), 2186–2202.
Sinaga, M., Zalukhu, R. S., Hutauruk, R. P. S., & Collyn, D. (2023). Convergence of regional GDP per capita among the big islands in Indonesia. JPPI (Jurnal Penelitian Pendidikan Indonesia), 9(2), 818. https://doi.org/10.29210/020232728
Suryadarma, D., Suryahadi, A., & Sumarto, S. (2006). Causes of Low Secondary School Enrollment in Indonesia. SMERU Research Institute.
Sutrisno, S., & Taufiqqurrachman, F. (2025). The Impact Of Balance Funds And Local Real Income On Poverty In Papua Province. Equity: Jurnal Ekonomi, 13(1), 123–132. https://doi.org/10.33019/equity.v13i1.428
Tadjoeddin, M. Z., Suharyo, W. I., & Mishra, S. (2001). Regional Disparity and Vertical Conflict in Indonesia. Journal of the Asia Pacific Economy, 6(3), 283–304. https://doi.org/10.1080/13547860120097368
Todaro, M., & Smith, S. (2015). Economic development (12th ed). The George Washington University.
Triwulandari, B. B., Boedirochminarni, A., & Firmansyah, M. (2023). Analisis Pengaruh Pendapatan Asli Daerah, Pertumbuhan Ekonomi dan Pengangguran terhadap Kemiskinan di Pulau Jawa Tahun 2013-2022. JSHP : Jurnal Sosial Humaniora Dan Pendidikan, 7(2), 175–187. https://doi.org/10.32487/jshp.v7i2.1747
Tuharea, L. I., Bugis, M., & Katje Tupamahu, M. (2024). Analysis of the Influence of Education, Health, and Gross Regional Domestic Product (GRDP) on Poverty in Central Maluku Regency. Daengku: Journal of Humanities and Social Sciences Innovation, 4(2), 248–259. https://doi.org/10.35877/454RI.daengku2457
Wau, M., & Mendrofa, K. J. (2022). Efektivitas Dana Perimbangan dan Pendapatan Asli Daerah Terhadap Pertumbuhan Ekonomi di Provinsi Sumatera Barat. Jurnal Mutiara Ilmu Akuntansi, 7(2), 163–166. https://doi.org/10.51544/jma.v7i2.3523
Zulfatoni, P., & Firmansyah, M. (2024). The Effect of Local Original Income (PAD), Transfer Funds (Balanced Funds), and Regional Economic Growth on the Regional Poverty Rate of West Nusa Tenggara Province (NTB). International Journal of Multidisciplinary Research and Analysis, 07(05). https://doi.org/10.47191/ijmra/v7-i05-52
