TITLE:
A Simple Mitigation Model of Poverty Reduction in Indonesia
AUTHORS:
P. Eko Prasetyo, Partono Thomas
KEYWORDS:
Mitigation Model, Reduce Poverty, Human Development Index and Economic Growth
JOURNAL NAME:
Open Journal of Business and Management,
Vol.9 No.6,
November
3,
2021
ABSTRACT: Sustainable development (SDG) aims to reduce poverty in all places,
including Indonesia. The purpose of this research is to theoretically and
empirically explain a simple model of mitigation and poverty reduction. This
research applies a fixed-effect model and path analysis techniques using
regional panel data from 35 regencies and cities in 2017-2020 in Central Java,
Indonesia. Furthermore, the results showed that the Keynesian theory which
states that unemployment causes poverty is valid and relevant while the
statement of economic growth being the most effective aspect in poverty
reduction is not entirely true. The main empirical research results confirmed
that the Human Development Index (HDI) factor is the most effective aspect as a
key to success and a strong foundation
capital in mitigating and reducing poverty. Meanwhile, Income per Capita (IPC), government spending, GRDP, and investment
are the main drivers to increase HDI and reduce poverty.