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

Imam Mukhlis and Timbul Hamonangan Simanjuntak

International Journal of Management Sciences, 2016, vol. 7, issue 1, 14-20

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.

Keywords: Poverty; Panel Data; Fixed Effect Model; Economic Growth (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (1)

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