DOES ZAKAT MATTER FOR HUMAN DEVELOPMENT? AN EMPIRICAL EVIDENCE FROM INDONESIA

I.K. Balyanda Akmal (), M. Shabri Abd. Majid and Eddy Gunawan
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I.K. Balyanda Akmal: Postgraduate Student in Economics, Faculty of Economics and Business, Universitas Syiah Kuala, Indonesia

Regional Science Inquiry, 2020, vol. XII, issue 2, 195-208

Abstract: This study aims to empirically measure and analyze the contribution zakat to human development and, consequently towards the achievement of the Sustainability Development Goals (SDGs) program in Indonesia. Specifically, this study intends to measure the differences in the Human Development Index (HDI) of zakat recipients before and after receiving zakat and measure the effect of zakat on the HDI and its components. The response to these issues, the study estimates the value of the Human Development Index (HDI) at a minor level; the individual and household levels. 100 recipients of zakat (mustahik) from the three programs of zakat distribution by the zakat institution of Aceh Province, Indonesia (Baitul Mal Aceh - BMA) were selected as the sample of the study using a combination of purposive and proportionate stratified random samplings. These zakat programs include zakat for cancer and thalassemia patients, zakat for one family one undergraduate scholarship, and zakat for buying working capital for the poor families. The paired t-test is adopted to assess the differences in HDI of zakat recipients before and after receiving zakat, while the multiple linear regression is used to measure the effect of zakat on the HDI and its components. The study found that, after receiving zakat, the HDI of zakat recipients is higher than before. Zakat is also recorded to have a significant positive effect on the HDI, while the family size affected negatively the HDI and the types of zakat and profession of zakat recipients have an insignificant effect on the HDI. These findings suggest the positive role of zakat in improving human development and it could be used as one of the instruments to accelerate the achievement of the SDGs agenda in Indonesia.

Keywords: Education; Health; Human Development; Welfare; Zakat (search for similar items in EconPapers)
JEL-codes: D64 I15 I25 I38 O15 Q01 (search for similar items in EconPapers)
Date: 2020
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