The Role of Economic Growth, Income Inequality, and Social Assistance in Shaping Poverty Dynamics in Central Java
Main Article Content
Maulana Ghani Yusuf*
Tangguh Pratysto
Poverty remains a development challenge, particularly those with low economic growth and poorly distributed social welfare. Despite high economic growth, poverty reduction often remains uneven, demonstrating the complex interactions between growth, income distribution, labor market conditions, and the social assistance safety net. This study aims to examine the factors influencing poverty, their relationship to economic growth, income inequality, unemployment, and the social assistance safety net in Central Java. Using a quantitative panel data methodology, this study analyses data on the variables used from 2019 to 2023. A fixed effects model with robust standard errors is used to consistently and effectively estimate the relationship between the determinants of poverty. The results of this study indicate that economic growth, particularly GDP, can significantly reduce poverty. Then income inequality also significantly influences poverty dynamics. Social assistance is positively related to poverty, meaning it effectively serves as a tool to help people avoid falling into poverty. Meanwhile, unemployment has an insignificant impact on poverty. It follows from the above that the poverty-reduction strategy in Central Java should not be oriented solely to the growth path but should be coupled with tax reform integrated into social assistance packages to improve targeting efficiency and sustainability.
Adrianto, B., Handoko, G., Purbaningrum, W., & Sarahtika, D. P. (2020). SMERU Annual Report 2020. The SMERU Research Institute. https://smeru.or.id/en/publication/2020-annual-report
Agustina, D. R., Rusgiyono, A., & Izati, P. P. (2025). Spatial Analysis of Poverty in Central Java Indonesia Through Multiscale Geographically Weighted Regression. International Journal of Mathematics And Computer Research, 13(5), 5156–5162. https://doi.org/10.47191/ijmcr/v13i5.03
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
Arfandi, R. Z., & Sumiyarti. (2022). Analisis Pembagian Manfaat atas Program Bantuan Sosial di Indonesia Tahun 2018. Media Ekonomi, 30(1), 1–15. https://doi.org/10.25105/me.v30i1.10304
Azizah, L. N., Pasaribu, J. R. S., Hutagalung, I., Purba, A. A., & Sinaga, S. A. (2024). Analisis Pengaruh PDRB dan Pengangguran Terhadap Kemiskinan di Indonesia Tahun 2018-2022. Journal of Sharia Economics Scholar (JoSES), 2(2), 25–32. https://doi.org/10.5281/zenodo.11641452
Cameron, L. A. (2000). Poverty and inequality in Java: examining the impact of the changing age, educational and industrial structure. Journal of Development Economics, 62(1), 149–180. https://doi.org/10.1016/S0304-3878(00)00079-1
Cerra, V., Loayza, N., & Lama, R. (2021). Links Between Growth, Inequality, and Poverty: A Survey. IMF Working Papers, 2021(068). https://doi.org/10.5089/9781513572666.001
Cholili, F. M. (2014). Analisis Pengaruh Pengangguran, Produk Domestik Regional Bruto (PDRB), dan Indeks Pembangunan Manusia (IPM) terhadap Jumlah Penduduk Miskin (Studi Kasus 33 Provinsi di Indonesia). Universitas Brawijaya Respository.
Dollar, D., Kleineberg, T., & Kraay, A. (2016). Growth still is good for the poor. European Economic Review, 81, 68–85. https://doi.org/10.1016/j.euroecorev.2015.05.008
Fields, G. S. (2011). Labor market analysis for developing countries. Labour Economics, 18, S16–S22. https://doi.org/10.1016/j.labeco.2011.09.005
Firdaus, A., Dawood, T. C., & Abrar, M. (2021). Determinants of Poverty in Indonesia: An Empirical Evidence using Panel Data Regression. International Journal of Global Operations Research, 2(4), 124–132. https://doi.org/10.47194/ijgor.v2i4.90
Fiszbein, A., Kanbur, R., & Yemtsov, R. (2014). Social Protection and Poverty Reduction: Global Patterns and Some Targets. World Development, 61, 167–177. https://doi.org/10.1016/j.worlddev.2014.04.010
Hair, J. F., Hult, G. T. M., Ringle, C. M., Sarstedt, M., Danks, N. P., & Ray, S. (2017). Partial Least Squares Structural Equation Modeling (PLS-SEM) Using R: A Workbook. Springer International Publishing. https://doi.org/10.1007/978-3-030-80519-7
Liu, M., Feng, X., Wang, S., & Qiu, H. (2020). China’s poverty alleviation over the last 40 years: successes and challenges. Australian Journal of Agricultural and Resource Economics, 64(1), 209–228. https://doi.org/10.1111/1467-8489.12353
Mahrina, M., Saharudddin, S., Juliansyah, H., & Anwar, K. (2022). Pengaruh Indeks Implisit PDRB Sektor Pertanian dan Industri Pengolahan terhadap Kemiskinan di Kota Lhokseumawe. Jurnal Aplikasi Ilmu Ekonomi, 1(2), 75–84. https://doi.org/10.29103/jaie.v1i2.10320
Manalu, S. P., Lubis, H., Nasution, A., Pakpahan, E., Hajatina, H., & Bukit, A. (2024). Analisis Pengaruh Laju Pertumbuhan PDRB, PDRB Per Kapita, Dan Gini Ratio Terhadap Tingkat Kemiskinan Provinsi Jawa Tengah Tahun 2013-2022. VALUE, 4(2), 237–253. https://doi.org/10.36490/value.v4i2.1065
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
Pertiwi, L. T. Y., & Islami, F. S. (2022). The Effect of Population, GRDP, and Investment on Employment in North Sulawesi Province. Journal of Humanities, Social Sciences and Business (JHSSB), 2(1), 109–121. https://doi.org/10.55047/jhssb.v2i1.385
Ravallion, M. (2012). Benchmarking global poverty reduction. World Bank Policy Research Working Paper.
Ravallion, M. (2016). The Economics of Poverty. Oxford University Press. https://doi.org/10.1093/acprof:oso/9780190212766.001.0001
Rusdarti, R., & Sebayang, L. K. (2013). Faktor-Faktor yang Mempengaruhi Tingkat Kemiskinan di Provinsi Jawa Tengah. Jurnal Economia, 9(1), 1–9. https://doi.org/10.21831/economia.v9i1.1371
Sen, A. (1999). Development as freedom. Oxford University Press.
Sulistiawan, A. (2023). Pengaruh Upah Minimum, Produk Domestik Regional Bruto (PDRB), dan Pengangguran Terhadap Kemiskinan di Provinsi Pulau Jawa. Jurnal Ilmu Ekonomi JIE, 7(1), 115–126. https://doi.org/10.22219/jie.v7i01.22271
Todaro, M., & Smith, S. (2020). Economic Development. Pearson.
Ward, P. S. (2016). Transient Poverty, Poverty Dynamics, and Vulnerability to Poverty: An Empirical Analysis Using a Balanced Panel from Rural China. World Development, 78, 541–553. https://doi.org/10.1016/j.worlddev.2015.10.022
Warr, P. (2006). Poverty and Growth in Southeast Asia. Asean Economic Bulletin, 23(3), 279–302. https://doi.org/10.1353/ase.2007.0023
