Do Financial Deepening, Government Spending, and Unemployment Benefit Poverty Reduction in Indonesia?

Elya Florennica; Ratu Eva Febriani

doi:10.29259/jep.v20i2.18610

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August 6, 2022

Accepted

January 12, 2023

Published

January 15, 2023

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Abstract

Poverty is classic problem faced in anycountry, various policies are carried out to reduce poverty to prosper the community. This study aims to analyze the effect of financial deepening, government spending, and unemployment on poverty in Indonesia. Observations were made in 33 provinces in Indonesia during the period 2012-2020. The model used is a panel data regression with fixed effect model. The results of this study indicate the financial deepening has a negative and significant effect on poverty, government spending has a negative and significant effect on poverty, and unemployment has a positive and significant effect on poverty. The implication is necessary to increase the role of the financial sector in every province in Indonesia, especially areas that are still low in financial deepening, optimize and increase government spending so that it can create new jobs and reduce the unemployment rate and poverty.

Keywords

Poverty financial deepening government spending unemployment.

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Florennica, E., & Febriani, R. E. (2023). Do Financial Deepening, Government Spending, and Unemployment Benefit Poverty Reduction in Indonesia?. Jurnal Ekonomi Pembangunan, 20(2), 193–204. https://doi.org/10.29259/jep.v20i2.18610

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References

Adam, D., Olilingo, F. Z., & Santoso, I. R. (2022). Analisis Pengaruh Pendidikan Dan Pengangguran Terhadap Kemiskinan Di Kawasan Kerjasama Utara-Utara. Jurnal Ekonomi Pembangunan STIE Muhammadiyah Palopo, 8(1), 97–111. https://doi.org/10.35906/jep.v8i1.1039
Aizenman, J., & Riera-Crichton, D. (2022). Real exchange rate and international reserves in an era of growing financial and trade integration. National Bureau of Economic Research, 12363. https://doi.org/10.1162/rest.90.4.812
Ali, M., Muhammad, F., Jailani, H., & Azmi, M. S. (2020). Pengaruh Belanja Pemerintah Terhadap Tingkat Kemiskinan Di Kabupaten Lombok Timur Tahun 2010-2018. JPEK (Jurnal Pendidikan Ekonomi dan Kewirausahaan), 4(1), 104-119.
Andhykha, R., Handayani, H. R., &Woyanti, N. (2018). Analisis Pengaruh PDRB, Tingkat Pengangguran, dan IPM Terhadap Tingkat Kemiskinan di Provinsi Jawa Tengah. Media Ekonomi dan Manajemen, 33(2), 113-123. https://doi.org/10.24856/mem.v33i2.671
Budhijana, R. B. (2020). Analisis Pengaruh Pertumbuhan Ekonomi, Index Pembangunan Manusia (IPM) dan Pengangguran Terhadap Tingkat Kemiskinan Di Indonesia Tahun 2000-2017. Jurnal Ekonomi, Manajemen dan Perbankan (Journal of Economics, Management and Banking), 5(1), 36-44. https://doi.org/10.35384/jemp.v5i1.170
Citra, H., Masbar, R., & Syahnur, S. (2018). Financial Deepening Dan Kemiskinan Di Indonesia. Jurnal Ekonomi dan Kebijakan Publik Indoneisa, 5(2), 116–133.
Cobbinah, P. B., Black, R., & Thwaites, R. (2013). Dynamics of poverty in developing countries: Review of poverty reduction approaches. Journal of Sustainable Development, 6(9), 25.
Deliarnov. (2014). Perkembangan Pemikiran Ekonomi (Edisi Ketiga). Rajawali Pers.
Digdowiseiso, K. (2017). Metode Penelitian Ekonomi dan Bisnis. Jakarta: Lembaga Penerbitan Universitas Nasional
Dzulhijjy, M. I. (2021). Analisis Pengaruh Belanja Pemerintah terhadap Indeks Pembangunan Manusia dan Kemiskinan Ditinjau Dari Tingkat Pendidikan dan Kesehatan (Studi Kasus Provinsi Daerah Istimewa Yogyakarta). Jurnal Ilmiah Mahasiswa FEB, 9(2), 1-13.
Ghozali, I., & Ratmono, D. (2017). Analisis Multivariat Dan Ekonometrika: Teori, Konsep, Dan Aplikasi Dengan Eviews 10. Semarang: Badan Penerbit UNDIP (UNDIP Press).
Gujarati, Damodar N, Dawn C. Porter, dan R. C. M. (2012). Dasar-dasar Ekonometrika. Buku 2 Edisi 5. Jakarta: Salemba Empat.
Hasan, M., Arisah, N., Sawe Riesso, A., & Faradilla Hasanah, D. (2020). An Analysis of the Effect of Economic Growth, Inflation, and Open Unemployment on Poverty in South Sulawesi Province. In Quest Journals Journal of Research in Business and Management, 8 (9), 117-133.
Indonesia Center Bank (BI). (2020). Statistik Ekonomi dan Keuangan Daerah (SEKDA). https://www.bi.go.id/id/statistik/ekonomi-keuangan/sekda/StatistikRegional.aspx?idprov=17
Jhingan, M. . (2013). Ekonomi Pembangunan dan Perencanaan. PT Raja Grafindo Persada.
Kuncoro, M. (2011). Dasar-dasar Ekonomika Pembangunan. UPP STIM YKPN.
Lantu, Y. S. M., Koleangan, R. A., & Rotinsulu, T. O. (2017). Pengaruh Belanja Pemerintah terhadap Pertumbuhan Ekonomi dan Pengentasan Kemiskinan di Kota Bitung. Jurnal Pembangunan Ekonomi dan Keuangan Daerah, 18(5), 1-17.
Mackett, O. (2020). Social Grants as a Tool for Poverty Reduction in South Africa? A Longitudinal Analysis Using the NIDS Survey. African Studies Quarterly, 19(1), 41-64.
Miar, M., & Yunani, A. (2020). The Analysis of Influence of The Government Expenditure on Poverty in Indonesia. Jurnal Ekonomi Pembangunan, 18(1), 91-102.
Mohammad, U. F., & David, J. (2019). The Relationship between Poverty and Unemployment in Niger State. Signifikan : Jurnal Ilmu Ekonomi, 8(1), 71–78. https://doi.org/10.15408/sjie.v8i1.6725
Mukhtar, S., Saptono, A., & Arifin, A. S. (2019). Analisis Pengaruh Indeks Pembangunan Manusia Dan Tingkat Pengangguran Terbuka Terhadap Kemiskinan Di Indonesia. Ecoplan : Journal of Economics and Development Studies, 2(2), 77–89. https://doi.org/10.20527/ecoplan.v2i2.68
Nyamweya, J. M., Ochieng, D. E., Ondigo, H., & Magutu, P. O. (2020). Economic Growth, Financial Deepening, Income Distribution, Financial Efficiency and Poverty Level Nexus: A Cointegration and Causality Analysis in Kenya. DBA Africa Management Review, 10(3), 58-72.
Nurkse, R. (1952). Some international aspects of the problem of economic development. The American Economic Review, 42(2), 571-583.
Pratama, C. Y. (2019). Analisis Faktor - Faktor Yang Mempengaruhi Kemiskinandi IndonesiaTujuan dari penelitian ini ada. Jurnal Administrasi Publik dan Bisnis, 1(2), 1–15.
Prabowo, B. H. (2021). Analisis Pendalaman Keuangan di Indonesia. Jurnal Manajemen Jayanegara, 13(1), 1–5. https://doi.org/10.52956/jmj.v13i1.25
Putra, K., & Arka, S. (2018). Analisis Pengaruh Tingkat Pengangguran Terbuka, Kesempatan Kerja, Dan Tingkat Pendidikan Terhadap Tingkat Kemiskinan Pada Kabupaten/Kota Di Provinsi Bali. E-Jurnal Ekonomi Pembangunan Universitas Udayana. 7(3), 416 - 444.
Putri, N. V. K., & Mubin, M. K. (2021). Financial Deepening Relationship With Economic Growth In Indonesia. Jurnal Ilmu Ekonomi Terapan, 6(1), 133-157. https://doi.org/10.20473/jiet.v6i1.26220
Rambe, R. A., Purmini, P., Armelly, A., Alfansi, L., & Febriani, R. E. (2022). Efficiency Comparison of Pro-Growth Poverty Reduction Spending before and during the COVID-19 Pandemic: A Study of Regional Governments in Indonesia. Economies, 10(6),150. Doi:https://doi.org/10.3390/economies10060150
Ran, M., Chen, L., & Li, W. (2020). Financial deepening, spatial spillover, and urban–rural income disparity: Evidence from China. Sustainability, 12(4), 1450. DOI:http://dx.doi.org/10.3390/su12041450
Ruslan, D. (2011). Analisis financial deepening di Indonesia. Journal of Indonesian Applied Economics, 5(2), 183-204
Sasmal, R., & Sasmal, J. (2016). Public expenditure, economic growth and poverty alleviation. International Journal of Social Economics, 43(6), 604–618. https://doi.org/10.1108/IJSE-08-2014-0161
Statistics Indonesia. (2021). Penghitungan dan Analisis Kemiskinan Makro Indonesia Tahun 2021. Badan Pusat Statistik
Statistics Indonesia. (2020). Persentase Penduduk Miskin (P0) Menurut Provinsi dan Daerah. Badan Pusat Statistik
Sukomo, S., & Prawiranegara, B. (2019). Analisis Posisi Kredit Perbankan Implikasinya Terhadap Kemiskinan Di Jawa Barat. Journal of Management Review, 3(3), 19-28. DOI: http://dx.doi.org/10.25157/mr.v3i3.2868
Taruno, H. T. (2019). Public Spending and Poverty Reduction in Indonesia: The Effects of Economic Growth and Public Spending on Poverty Reduction in Indonesia 2009-2018. The Indonesian Journal of Planning and Development, 4(2), 49–56. https://doi.org/10.14710/ijpd.4.2.49-56
Trinugroho, I., Agusman, A., Ariefianto, M. D., Darsono, D., & Tarazi, A. (2015). Determinants of cross regional disparity in financial deepening: Evidence from Indonesian provinces. Economics Bulletin, 35(2), 896-910.
Widarjono, A. (2009). Ekonometrika Pengantar dan Aplikasinya (Edisi Ketiga). Ekonesia.
Winarno, W. W. (2015). Analisis Ekonomi Dan Statistika Dengan Eviews. UPP STIM YKPN.
Wooldridge. (2013). Introductory Econometrics: A Practical Approach (5th edition). Cengage Learning. https://doi.org/10.4324/9780203157688
WorldBank.(2016).Financial development. World Bank.

References

Adam, D., Olilingo, F. Z., & Santoso, I. R. (2022). Analisis Pengaruh Pendidikan Dan Pengangguran Terhadap Kemiskinan Di Kawasan Kerjasama Utara-Utara. Jurnal Ekonomi Pembangunan STIE Muhammadiyah Palopo, 8(1), 97–111. https://doi.org/10.35906/jep.v8i1.1039

Aizenman, J., & Riera-Crichton, D. (2022). Real exchange rate and international reserves in an era of growing financial and trade integration. National Bureau of Economic Research, 12363. https://doi.org/10.1162/rest.90.4.812

Ali, M., Muhammad, F., Jailani, H., & Azmi, M. S. (2020). Pengaruh Belanja Pemerintah Terhadap Tingkat Kemiskinan Di Kabupaten Lombok Timur Tahun 2010-2018. JPEK (Jurnal Pendidikan Ekonomi dan Kewirausahaan), 4(1), 104-119.

Andhykha, R., Handayani, H. R., &Woyanti, N. (2018). Analisis Pengaruh PDRB, Tingkat Pengangguran, dan IPM Terhadap Tingkat Kemiskinan di Provinsi Jawa Tengah. Media Ekonomi dan Manajemen, 33(2), 113-123. https://doi.org/10.24856/mem.v33i2.671

Budhijana, R. B. (2020). Analisis Pengaruh Pertumbuhan Ekonomi, Index Pembangunan Manusia (IPM) dan Pengangguran Terhadap Tingkat Kemiskinan Di Indonesia Tahun 2000-2017. Jurnal Ekonomi, Manajemen dan Perbankan (Journal of Economics, Management and Banking), 5(1), 36-44. https://doi.org/10.35384/jemp.v5i1.170

Citra, H., Masbar, R., & Syahnur, S. (2018). Financial Deepening Dan Kemiskinan Di Indonesia. Jurnal Ekonomi dan Kebijakan Publik Indoneisa, 5(2), 116–133.

Cobbinah, P. B., Black, R., & Thwaites, R. (2013). Dynamics of poverty in developing countries: Review of poverty reduction approaches. Journal of Sustainable Development, 6(9), 25.

Deliarnov. (2014). Perkembangan Pemikiran Ekonomi (Edisi Ketiga). Rajawali Pers.

Digdowiseiso, K. (2017). Metode Penelitian Ekonomi dan Bisnis. Jakarta: Lembaga Penerbitan Universitas Nasional

Dzulhijjy, M. I. (2021). Analisis Pengaruh Belanja Pemerintah terhadap Indeks Pembangunan Manusia dan Kemiskinan Ditinjau Dari Tingkat Pendidikan dan Kesehatan (Studi Kasus Provinsi Daerah Istimewa Yogyakarta). Jurnal Ilmiah Mahasiswa FEB, 9(2), 1-13.

Ghozali, I., & Ratmono, D. (2017). Analisis Multivariat Dan Ekonometrika: Teori, Konsep, Dan Aplikasi Dengan Eviews 10. Semarang: Badan Penerbit UNDIP (UNDIP Press).

Gujarati, Damodar N, Dawn C. Porter, dan R. C. M. (2012). Dasar-dasar Ekonometrika. Buku 2 Edisi 5. Jakarta: Salemba Empat.

Hasan, M., Arisah, N., Sawe Riesso, A., & Faradilla Hasanah, D. (2020). An Analysis of the Effect of Economic Growth, Inflation, and Open Unemployment on Poverty in South Sulawesi Province. In Quest Journals Journal of Research in Business and Management, 8 (9), 117-133.

Indonesia Center Bank (BI). (2020). Statistik Ekonomi dan Keuangan Daerah (SEKDA). https://www.bi.go.id/id/statistik/ekonomi-keuangan/sekda/StatistikRegional.aspx?idprov=17

Jhingan, M. . (2013). Ekonomi Pembangunan dan Perencanaan. PT Raja Grafindo Persada.

Kuncoro, M. (2011). Dasar-dasar Ekonomika Pembangunan. UPP STIM YKPN.

Lantu, Y. S. M., Koleangan, R. A., & Rotinsulu, T. O. (2017). Pengaruh Belanja Pemerintah terhadap Pertumbuhan Ekonomi dan Pengentasan Kemiskinan di Kota Bitung. Jurnal Pembangunan Ekonomi dan Keuangan Daerah, 18(5), 1-17.

Mackett, O. (2020). Social Grants as a Tool for Poverty Reduction in South Africa? A Longitudinal Analysis Using the NIDS Survey. African Studies Quarterly, 19(1), 41-64.

Miar, M., & Yunani, A. (2020). The Analysis of Influence of The Government Expenditure on Poverty in Indonesia. Jurnal Ekonomi Pembangunan, 18(1), 91-102.

Mohammad, U. F., & David, J. (2019). The Relationship between Poverty and Unemployment in Niger State. Signifikan : Jurnal Ilmu Ekonomi, 8(1), 71–78. https://doi.org/10.15408/sjie.v8i1.6725

Mukhtar, S., Saptono, A., & Arifin, A. S. (2019). Analisis Pengaruh Indeks Pembangunan Manusia Dan Tingkat Pengangguran Terbuka Terhadap Kemiskinan Di Indonesia. Ecoplan : Journal of Economics and Development Studies, 2(2), 77–89. https://doi.org/10.20527/ecoplan.v2i2.68

Nyamweya, J. M., Ochieng, D. E., Ondigo, H., & Magutu, P. O. (2020). Economic Growth, Financial Deepening, Income Distribution, Financial Efficiency and Poverty Level Nexus: A Cointegration and Causality Analysis in Kenya. DBA Africa Management Review, 10(3), 58-72.

Nurkse, R. (1952). Some international aspects of the problem of economic development. The American Economic Review, 42(2), 571-583.

Pratama, C. Y. (2019). Analisis Faktor - Faktor Yang Mempengaruhi Kemiskinandi IndonesiaTujuan dari penelitian ini ada. Jurnal Administrasi Publik dan Bisnis, 1(2), 1–15.

Prabowo, B. H. (2021). Analisis Pendalaman Keuangan di Indonesia. Jurnal Manajemen Jayanegara, 13(1), 1–5. https://doi.org/10.52956/jmj.v13i1.25

Putra, K., & Arka, S. (2018). Analisis Pengaruh Tingkat Pengangguran Terbuka, Kesempatan Kerja, Dan Tingkat Pendidikan Terhadap Tingkat Kemiskinan Pada Kabupaten/Kota Di Provinsi Bali. E-Jurnal Ekonomi Pembangunan Universitas Udayana. 7(3), 416 - 444.

Putri, N. V. K., & Mubin, M. K. (2021). Financial Deepening Relationship With Economic Growth In Indonesia. Jurnal Ilmu Ekonomi Terapan, 6(1), 133-157. https://doi.org/10.20473/jiet.v6i1.26220

Rambe, R. A., Purmini, P., Armelly, A., Alfansi, L., & Febriani, R. E. (2022). Efficiency Comparison of Pro-Growth Poverty Reduction Spending before and during the COVID-19 Pandemic: A Study of Regional Governments in Indonesia. Economies, 10(6),150. Doi:https://doi.org/10.3390/economies10060150

Ran, M., Chen, L., & Li, W. (2020). Financial deepening, spatial spillover, and urban–rural income disparity: Evidence from China. Sustainability, 12(4), 1450. DOI:http://dx.doi.org/10.3390/su12041450

Ruslan, D. (2011). Analisis financial deepening di Indonesia. Journal of Indonesian Applied Economics, 5(2), 183-204

Sasmal, R., & Sasmal, J. (2016). Public expenditure, economic growth and poverty alleviation. International Journal of Social Economics, 43(6), 604–618. https://doi.org/10.1108/IJSE-08-2014-0161

Statistics Indonesia. (2021). Penghitungan dan Analisis Kemiskinan Makro Indonesia Tahun 2021. Badan Pusat Statistik

Statistics Indonesia. (2020). Persentase Penduduk Miskin (P0) Menurut Provinsi dan Daerah. Badan Pusat Statistik

Sukomo, S., & Prawiranegara, B. (2019). Analisis Posisi Kredit Perbankan Implikasinya Terhadap Kemiskinan Di Jawa Barat. Journal of Management Review, 3(3), 19-28. DOI: http://dx.doi.org/10.25157/mr.v3i3.2868

Taruno, H. T. (2019). Public Spending and Poverty Reduction in Indonesia: The Effects of Economic Growth and Public Spending on Poverty Reduction in Indonesia 2009-2018. The Indonesian Journal of Planning and Development, 4(2), 49–56. https://doi.org/10.14710/ijpd.4.2.49-56

Trinugroho, I., Agusman, A., Ariefianto, M. D., Darsono, D., & Tarazi, A. (2015). Determinants of cross regional disparity in financial deepening: Evidence from Indonesian provinces. Economics Bulletin, 35(2), 896-910.

Widarjono, A. (2009). Ekonometrika Pengantar dan Aplikasinya (Edisi Ketiga). Ekonesia.

Winarno, W. W. (2015). Analisis Ekonomi Dan Statistika Dengan Eviews. UPP STIM YKPN.

Wooldridge. (2013). Introductory Econometrics: A Practical Approach (5th edition). Cengage Learning. https://doi.org/10.4324/9780203157688

WorldBank.(2016).Financial development. World Bank.

Do Financial Deepening, Government Spending, and Unemployment Benefit Poverty Reduction in Indonesia?

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