JEJAK
Vol 12, No 1 (2019): March 2019

Economic Growth and Poverty: The Mediating Effect of Employment

Purnomo, Sodik Dwi (Unknown)
Istiqomah, Istiqomah (Unknown)



Article Info

Publish Date
10 Mar 2019

Abstract

The results of previous research on the relationship between economic growth and poverty have shown inconclusive results. This could be due to the fact that the relationship between these variables is indirect. Therefore, this study tries to introduce employment opportunity as a mediating variable. In addition, the authors also examined the effect of control variables consisting of dependency ratio, education, and infrastructure. The data used in this study are panel data of 6 provinces on Java Island in the period of 2000-2017. The methods used in this study are path analysis and multiple linear regression. The results  show that employment opportunity perfectly mediates the relationship between poverty and economic growth. This study also found that dependency ratio and education had a significant effect on poverty, while infrastructure had a negative, but insignificant effect on poverty. The perfect mediating effect implies that economic growth will reduce poverty only if the economic growth is able to generate employment opportunities. These findings imply the importance of inclusive growth that gives access to the poor to work and business opportunities.

Copyrights © 2019






Journal Info

Abbrev

jejak

Publisher

Subject

Economics, Econometrics & Finance

Description

JEJAK: Jurnal Ekonomi dan Kebijakan p-ISSN 1979-715X | e-ISSN 2460-5123 is a scientific journal that contains the results of research and theoretical studies in the field of economic development, especially on matters of economic policy in Indonesia was published by the Department of Economic ...