Regional Poverty: An Analysis of Inclusive Growth in Indonesia

Abstract

Various studies have shown a negative correlation between poverty and economic growth. However, poverty reduction in Indonesia has begun to slow down, accompanied by income inequality. This study aims to determine how economic growth can benefit poor people and focus on the relationship between inclusive growth and women. To determine the extent of inclusive growth in Indonesia, a calculation is made using the Poverty Equivalent Growth Rate (PEGR) and social mobility curve from the 2015-2019 national socioeconomic survey data (Susenas) sourced from Statistics Indonesia. Next, the panel data regression determines what factors drive inclusive growth. Analysis of the data demonstrated that, in general, Indonesia had not shown inclusive growth in 2015-2019. Only a few provinces in Indonesia experienced inclusive growth during that timeframe. The results indicate that education, contributions of women in economics, and household size can drive economic growth so that inclusive growth can be achieved. On this basis, it is recommended that the Indonesian government pay more attention to handling poverty, primarily through the education and empowerment of women. Further research is required to identify other factors that could influence Inclusive growth in Indonesia.