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The Nexus of Economic Factors and Poverty in the Region’s Economy

Author

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  • Imam Mukhlis
  • Timbul Hamonangan Simanjuntak

Abstract

This study aims to give analysis for the effect of the economic growth rate, the minimum wage and unemployment on poverty in 38 districts / cities in East Java province during 2010-2014. The method of data analysis used in this study is the selection of panel data model in form of a fixed effect model. The results provide the conclusion that the rate of economic growth has no significant effect on poverty levels in various districts / cities in East Java. Minimum wage variable has a regression coefficient of - 0.079224 and significant. It means that a higher minimum wage would reduce poverty in the area. Meanwhile, the unemployment variable has a regression coefficient of 0.275130. It means that higher unemployment will further increase the level of poverty in the area. Based on the above results, the policy recommendations that can be given are: the creation of economic growth can be done through giving attention on the economic potential of local and regional resources, establishing communication with the various parties involved in determining the amount of the minimum wage so that the amount of the minimum wage can increase the productivity of its work, the expansion of employment opportunities in various sectors of economic and infrastructure development in the poverty centers in the districts.

Suggested Citation

  • Imam Mukhlis & Timbul Hamonangan Simanjuntak, 2016. "The Nexus of Economic Factors and Poverty in the Region’s Economy," International Journal of Management Sciences, Research Academy of Social Sciences, vol. 7(1), pages 14-20.
    • Handle: RePEc:rss:jnljms:v7i1p3
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    References listed on IDEAS

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    1. Pierre‐Richard Agénor, 2005. "The Macroeconomics Of Poverty Reduction," Manchester School, University of Manchester, vol. 73(4), pages 369-434, July.
    2. Ms. Anne Epaulard, 2003. "Macroeconomic Performance and Poverty Reduction," IMF Working Papers 2003/072, International Monetary Fund.
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    Cited by:

    1. Imam Mukhlis & Isnawati Hidayah & Sariyani, 2018. "Economic agglomeration, economic growth and income inequality in regional economies," Economic Journal of Emerging Markets, Universitas Islam Indonesia, vol. 10(2), pages 205-212, Oktober.

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